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Variable Rate Mortgages
Mortgages are available in a number of different interest rate options, one of which is the variable rate mortgage .
Variable rate mortgage have been available for many years. As the name suggests, the monthly repayment goes up and down in line with the Lender's mortgage rate. This means that you cannot predict the monthly cost of the mortgage from one year to the next. This can cause major budgeting problems in a period of increasing interest rates. On the other hand, when interest rates fall, there is less to pay.
Many lenders do not alter the rate for existing borrowers until the year-end. With interest rates used as a regulator for the economy, mortgage interest rates change frequently. When interest rates change (or when the lender decides), the variable rate will also change. However, if the interest rates change, the lender does not have to pass this on to the borrower
Variabe rate mortgage