Carney, Ford Announce $8.8B Deal To Cut ON Development Charges By Up To 50%

Floating Rate Mortgage

Learn about floating rate mortgages in Canadian real estate — what they are, how they work, and their benefits and risks.

Floating Rate Mortgage

July 27, 2025


What is a Floating Rate Mortgage?

A floating rate mortgage, also known as a variable rate mortgage, is a loan where the interest rate fluctuates based on changes in a benchmark rate, such as the prime rate.

Why Floating Rate Mortgages Matter in Real Estate

In Canadian real estate financing, floating rate mortgages offer the potential for lower interest costs when rates fall but carry the risk of higher payments if rates rise.



Key features:



Understanding floating rate mortgages helps borrowers balance interest cost savings with payment stability.

Example of a Floating Rate Mortgage in Action

The homeowner chose a floating rate mortgage to take advantage of lower initial interest rates, accepting the risk of future increases.

Key Takeaways

  • Interest rate moves with market conditions
  • Payments may rise or fall over time
  • Potential for cost savings when rates drop
  • Risk of higher costs when rates increase
  • Requires borrower comfort with variability

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

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