A variable rate mortgage is a type of mortgage in which the interest rate keeps on fluctuating based on the status of market. Variable rate mortgages depend on prime lending rates and five year term or less. This allows you to experience the benefits low prime rates. Variable Mortgages are mostly used for purchases, refinancing, investment refinancing, rental properties, renovating a house and much more. With the time, more varieties are being evolved with different pre-payment choices.
But what if the prime rate increases? Usually the prime rates do not go high overnight. But if the prime rate goes up, Mortgage Merchant offers you to switch to fixed mortgage rate product, locking at current fixed-rate mortgage rate, at any time and that too without penalty. In case if prime rates decrease, more of your payment will be applied to the principal that will reduce the duration of your mortgage.
To learn more about Variable Rate Mortgages, contact our mortgage broker now.