How does a Variable Rate Work?
Video Highlights:
Understanding Variable Rate Mortgages
An overview of variable-rate mortgages (VRMs) and how they differ from adjustable-rate mortgages (ARMs) in Canada.
Key Differences Between VRMs and ARMs
Explanation of how VRMs maintain consistent payments with a fluctuating principal-to-interest ratio, while ARMs adjust monthly payments based on interest rate changes.
Lender Preferences for VRMs and ARMs
Insights into which lenders in Canada typically offer VRMs (e.g., TD, CIBC, Manulife) versus those that focus on ARMs (e.g., Scotiabank, monoline lenders, credit unions).
The Pros and Cons of Floating Rates
Discussion on how floating interest rates can help borrowers save money when rates are low, along with the potential risk of rising rates.
Expert Guidance from Mortgage Brokers
Reassurance that mortgage brokers can help borrowers choose between VRMs and ARMs based on their unique financial situation.