A Variable Rate Mortgage (VRM) features interest rates that fluctuate based on market conditions. Borrowers may benefit from lower initial rates but face potential cost increases over time.

• Market Dependency: Adjusts based on benchmark interest rates.
• Lower Initial Cost: Often starts with reduced payments compared to fixed-rate loans.
• Risk Factor: Payments may rise if rates increase.
• Refinancing Option: Borrowers can switch to fixed rates for stability.

Variable rate mortgages suit risk-tolerant borrowers looking for short-term savings with flexible refinancing potential.