A Canadian mortgage product where the interest rate is set at a discount or premium relative to the lender’s prime rate and fluctuates as prime changes, which is in turn influenced by the Bank of Canada’s overnight rate target. Variable rate mortgages in Canada typically have either variable payments (payment changes with rate) or fixed payments (the proportion applied to principal changes). Variable rates have historically been lower than fixed rates over time, but involve more uncertainty.
Synonyms:
variable mortgage|floating rate mortgage|VRM