Variable Rate Mortgages float up and down with the Canadian Prime Rate which, when it changes, only does so in small increments. When the rate goes up or down, it does so slowly, and the actual impact on your monthly payment is equally minor. In addition to generally offering the lowest mortgage rate available, a variable rate mortgage could potentially save you thousands of dollars in interest costs over the life of your mortgage. Variable Rate Mortgages work very similarly to Fixed Rate Mortgages, though there are more term lengths to choose from with Fixed Rate products. Variables tend to be either 3 or 5 year terms.

Variable Rate Mortgages tend to be more difficult to qualify for, as the lenders require more in the way of proof of income, credit scores, and job stability. This is due to their perceived increase in risk, with this product.

Like Fixed Rates, Variable Rate Mortgages can be either Open or Closed. If the mortgage is Closed, then the conditions of the loan are locked in for the length of the term. More often though with Variable Rate Mortgages, the mortgage is Open, and you could lock the rate in or pay the mortgage off at any time if you felt the rates were getting out of control.