Adjustable-Rate Mortgage

In Canada, mortgage agents distinguish between two flavours of variable mortgage: adjustable-rate (ARM) and fixed-payment variable (VRM). With an ARM, your monthly payment changes when the lender's prime rate moves — your interest cost and principal portion both shift in real time. With a fixed-payment VRM, your payment stays the same; only the split between principal and interest changes. ARMs are more transparent — you see rate moves immediately on your bank account. VRMs feel smoother but can drift dangerously: if rates rise enough, the fixed payment may no longer cover interest at all, hitting the trigger rate, at which point the lender requires action. Different lenders default to different products and use the terms loosely. When shopping, always confirm: "Is the payment fixed or floating?" That's the question that matters, not the marketing label.