Adjustable Rate Mortgage

Variable & Fixed

Adjustable Rate Mortgage

Adjustable mortgage Adjustable Rate Mortgages are home loans that follow the prime lending rate in Canada. Most of these mortgages are offered on a 5 year term. They are available throughout Canada and usually have no geographic or irregular credit restrictions. They are available for purchases, first time buyers, refinances, renewals, debt consolidations and rental properties.

Apply for an Adjustable Rate Mortgage

DID YOU KNOW: With so many different products available, we have discovered that not every lender uses the same (or correct) terminology and we have seen many different terms for the same product. For example, a variable rate mortgage to one lender may be an adjustable rate mortgage to another. We have also seen ARMs referred to as adjustable mortgage loans (AMLs) and so forth. So if this seems confusing, don't worry because we here to make sense of it all.

An Adjustable Rate Mortgage is generally a lower rate then the current fixed rates that are available to mortgage borrowers. When a borrower requests an Adjustable Rate Mortgage, they are usually familiar with how the market operates. They know where prime rate is and they have no problem watching the market for changes or following the Bank of Canada announcements.

When and if an Adjustable Rate Mortgage is no longer attractive, the borrower may lock into a very competitive fixed rate mortgage term. The lock in terms available can range from a 1 year to a 25 year term depending on the remaining months left in your term. Meaning, if you have chosen a 5 year Adjustable Rate Mortgage and you are already 2 years into the term, you only have to lock in for a 3 year fixed term if you like. You can also lock into a longer term (up to 25 years) than the original 5 year term if you desire. The minimum combined term of either fixed or adjustable, must be equal to a minimum of 5 years though.

If you are okay with your mortgage payment changing from time to time, an adjustable rate mortgage without fixed payments could be your best option. However, when the interest rate goes go up or down, your monthly mortgage payments are adjusted accordingly. The advantage to having this type of product is that a good portion of your mortgage payments will always be applied to your principal regardless of how much the rate changes.

A few points to consider before choosing this type of mortgage:

Alberta Equity Mortgage brokers can assist you in determining if the Adjustable Rate Mortgage is right for you.

Adjustable rate mortgages at a glance


  • These mortgages follow the prime lending rate, so you'll generally be paying less interest over your term than in a fixed rate mortgage.
  • You can choose to lock in at a very competitive rate whenever you like.
  • If rates decrease, your constant payments can dramatically shorten the life of your mortgage.


  • You must keep an eye on the rate; otherwise increases in the prime rate can erode your equity.
  • Your payment is NOT fixed. It can fluctuate with prime rate.

Alberta Equity has helped over 50,000 people find and qualify for the best mortgages in Canada for over ten years. We do all of the heavy lifting and ensure that you get the best mortgage rates and product features available. Apply online for a free, no obligation consultation.