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Variable Rate Mortgages

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Variable Rate Mortgage: The Perks Of Variation

by Jenny Lane

Variable rate mortgage is another term for adjustable-rate mortgage. Variable rate mortgage is a type of loan where the initial payments are low. After some time though, the interest rates of variable rate mortgage changes on a regular basis. These changes on variable rate mortgages are affected by several factors, such as changes in investor markets.

Because of its low initial payment, a lot of people like to take on a variable rate mortgage. Financial reports suggest that the risks you assume in taking a variable rate mortgage are considerable but the gains are even more so. This is because variable rate mortgages may turn out to be cheaper than fixed rate mortgages in the long run.

Several lenders offer variable rate mortgages among their product lines. Some of these lenders are listed below, along with a brief outline on their variable rate mortgage product.

Variable Rate Mortgage by ING Direct Mortgages

The ING Direct line of variable rate mortgages offers one of the lowest rates available in the market today. With a variable rate mortgage interest rate of less than 0.60% for a full five-year term, ING Direct variable rate mortgages are among the top-sellers.

As an added bonus, consumers who buy their variable rate mortgages from ING Direct have the option to convert their variable rate mortgage into a fixed rate mortgage of 3 years or more. This conversion from a variable rate mortgage to fixed rate can be done any time without penalties.

Every 3 months, ING Direct variable rate mortgage interest rate will be adjusted to reflect their prime rate.

Variable Rate Mortgage by CanEquity Mortgage Canada

The variable rate mortgage of CanEquity is based on a five year term. However, in this variable rate mortgage, only the first three years are closed, leaving years 4 and 5 open. This means that the 2 remainder years leave you absolutely free from any variable rate mortgage pre-payment penalty.

CanEquity’s initial interest rate for their variable rate mortgage is 1.74%. After this initial rate, payments for your variable rate mortgage will be based on CanEquity’s Prime rate of less than 0.40%.

Variable Rate Mortgage by National Mortgage

National Mortgage has three variable rate mortgage programs on its product lists. All three variable rate mortgages have initial payment rates based on current Prime rate of 4.00%. These variable rate mortgage programs have varying terms from 3 months, 6 months, to 5 years.

The 5-year variable rate mortgage has an initial payment rate of 4.25% but for the duration of 5 years, the rate would be less 0.75%. The same goes for the 6-month variable rate mortgage. Prime (4.25%) is less 1.40% for 6 months followed by prime less 0.40% for the remainder of the term. The 3-month variable rate mortgage on the other hand has prime less 2.25% for 3 moths followed by Canadian Bank Prime less 0.375% with 1% cash back and airmiles.

Variable Rate Mortgage by Scotiabank

The Scotia Ultimate Variable Rate Mortgage offers their consumers a Cap rate guarantee. Consumers are given the choice of buying the variable rate mortgage for a rate discount of 0.50% off Scotia’s Prime rate for the full three-year term. They can also opt to pay upfront cash back of 1.50% of the variable rate mortgage loan amount for the full three-year term.

About the Author: Jenny Lane is a banking specialist who writes on related financing and banking industry topics. Find out more about the latest in banking industry at