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Trigger rates occur on variable rate mortgages (VRM) with fixed payments (static payments). When you signed your mortgage agreement, you opted for either an adjustable-rate mortgage (ARM), variable rate mortgage, or a fixed mortgage. There are many benefits and risks when it comes to choosing a variable vs. fixed rate — one of the risks of a variable rate mortgage (with fixed payments) is reaching your trigger rate and trigger point.
A Trigger Rate, Explained
Your trigger rate is the point at which your mortgage payments are no longer contributing towards your principal balance (amount owing on your mortgage), and instead are only paying off the interest on your loan.
When the prime rate increases significantly, the interest rate portion of your mortgage increases with it — but your mortgage payment remains the same. This results in less or no money being contributed towards your principal balance.
Basic Example With Regular Interest Rates:
Basic Example Where a Trigger Rate Is Met:
What Is MY Trigger Rate?
A trigger rate will be outlined in the terms of your mortgage contract, and it's a completely different number for each borrower. Your trigger rate depends on your amortization period, interest rate, and term.
Keep in mind that your trigger rate may have altered slightly from the original due to factors such as pre-payments you've made. It's wise to be 'in the know' of your current trigger rate so you can plan appropriately.
Solutions for Managing Your Trigger Rate
If your trigger rate is nearing, there are proactive paths to consider:
What Happens If I'm Not Proactive?
What's a Trigger Point?
Your trigger point is the 'point' where you owe more money on your mortgage than you did when you first secured your loan — this is negative amortization. Your trigger point is the next step after hitting your trigger rate.
Your trigger point is where your mortgage loan becomes unsustainable, and any payments you make may be landing you further in debt. Timely action must be taken because it puts you at higher risk for default.
It's important to be aware of economic trends and forecasts which could affect your mortgage. Managing your mortgage before it takes a turn for the worst can save you a lot of time and money in the long run.
For a no-obligation chat to discuss your trigger rate/trigger point, or to learn about mortgage solutions, reach out for a call!
The information provided on this page is for educational purposes and should not be implicitly relied upon. Conditions may apply and information may not be 100% up to date. Contact a licensed mortgage professional for the most current conditions and program offerings.
Have questions about trigger rate & trigger point: what they mean for your variable rate mortgage?
Call for a free, no-obligation consultation, or run the numbers first with the mortgage calculators.
(604) 780-5173About the author
Kyle Benzies, Licensed Mortgage Broker
I'm a licensed mortgage broker serving clients across British Columbia, Alberta, and Ontario. I work with a network of over 100 lenders — banks, credit unions, monoline, and alternative lenders — to find financing that fits each client's situation rather than a single institution's product shelf. Everything I publish here is written to explain how Canadian mortgage lending actually works, in plain language.
Published November 26, 2025
