Real Estate Glossary

What is Variable Rate Mortgage?

A variable rate mortgage is a type of home loan in which the interest rate can change over time. This is in contrast to a fixed-rate mortgage, in which the interest rate remains the same over the life of the loan. Variable rate mortgages often start with a lower interest rate than fixed-rate mortgages, but the interest rate can increase or decrease over time based on market conditions. This means that the monthly mortgage payments can also change, making budgeting for the loan more difficult.