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Acronym Monday: TR

Trigger Rate

Channeling mass zen during these 'triggering' times?

Trigger rates apply to variable-rate mortgage holders that are on a fixed payment schedule.

With a variable-rate mortgage, the amount you pay is usually fixed but the amount of your payment going to interest changes.

As rates increase or decrease, the amount you pay towards interest changes. As rates have gone up this year, interest payments have gone up as well.

When you reach your trigger rate, it means that you're paying more in interest than what is going to the principal. You want to try and avoid this so make sure to contact your mortgage professional to talk about either adjusting your payment schedule, making a pre-payment or even switching to a fixed-rate product.


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