What is a Trigger Rate

David Sahibzada • December 14, 2022

This is going to be the last time we’re talking about interest rates and mortgages this year. And if we’re happy about it, you’re likely ecstatic.


So, let’s get to today’s topic: what is a trigger rate and do you need to worry about it?


Brief Recap of Variable Rate Mortgages


We’ve covered this previously, but just so we’re all starting from the same page.


A variable rate mortgage means your interest rate is dependent on the Prime rate. Prime rate is the interest rate used by your lender or bank when lending to clients and is related to the Bank of Canada’s overnight lending rate.


When Bank of Canada rates go up, Prime Rates go up, and the interest you pay on your variable-rate mortgage also goes up. This interest payment can be paid in two ways:



  • Static Variable Rate Mortgage: Your monthly payment remains the same, but more of that payment goes towards interest.
  • Adjustable Rate Mortgage: Your monthly payment will increase when there is an increase in rates. Your principal payment will remain the same.


That was the shortest explanation of those two products we’ve ever done…might have to stick to that format.


Trigger Rates with Static Variable Rate Mortgage


The trigger rate is something that impacts static variable-rate mortgage holders. It’s the point at which your regular payment is no longer paying any principal; you’re just paying interest.


Definitely a ‘triggering’ situation.


When you reach this trigger rate, there’s an increase in the balance owed on your mortgage. This is because your payment is no longer enough to cover the cost of borrowing.


Any amount still owing is deferred interest to be paid at a later date.


But if you’re asking, “well, what is my trigger rate?” you’re going to have to give your trusted mortgage broker a call. Your trigger rate will be different from your neighbour’s, your cousin twice removed, and your niece who just bought her first house.


What Do You Do If You’ve Reached Your Trigger Rate?


According to a report by the Bank of Canada, “roughly half of all mortgage holders with static-payment variable-rate mortgages have already reached their trigger rate.”


Simply, you could leave your payment the way that it is, making interest-only payments until rates decrease.


But, we don’t recommend that.


You don’t want to be owing more on your mortgage, which will demand a higher interest payment down the road, even if (and when) rates come down. When this happens, you actually start to go backward on your amortization.


This is called ‘negative amortization’ and means that the principal payments are negative. Your mortgage balance increases each month in order to cover the interest cost.


Talk with your mortgage broker about how you can increase your monthly payment or change your payment schedule to make it more manageable.


Because you’re a variable-rate holder, it’s easier to break your mortgage if you need to refinance or move to a fixed-rate mortgage.


And don’t wait until you think rates will go down.


Rates are unpredictable to even those who make it their job to predict them. Reach out to a mortgage broker now if you’re coming up to your trigger rate.


We Have To Mention Trigger Point


Not to add more mud to the muddy waters, but alongside the trigger rate, there’s a trigger point.


A trigger point is when the balance on your mortgage is back at or exceeds the amount you borrowed when you first got your mortgage.


This could also be described as a percentage of your home’s value. For example, if your mortgage balance is over 100% of your home’s value, you’re at your trigger point.


Most lenders in Canada will use a trigger point of when the principal amount plus interest owing exceeds 80% of the fair market value.


When you reach this point, it’s going to trigger an action (see what we did there?)


Your lender is going to ask that you either increase your monthly payment, make a lump-sum payment, convert to a fixed rate or refinance to extend your amortization.


If you have any questions, please connect with me anytime!


This article was originally published on the Quantis Mortgage Solutions Website here.


David Sahibzada

Senior Mortgage Advisor

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Why You Should Work With An Independent Mortgage Professional

By David Sahibzada • October 28, 2025
If you need a mortgage, working with an independent mortgage professional will save you money and provide you with better options than dealing with a single financial institution. And if that is the only sentence you read in this entire article, you already know all you need to know. However, if you’d like to dig a little deeper, here are some reasons that outline why working with an independent mortgage professional is in your best interest. The best mortgage is the one that costs you the least over the long term. An independent mortgage professional can help you achieve this. Mortgages aren’t created equally. Oftentimes slick marketing leads us to believe the lowest “sticker price” is the best value. So when it comes to mortgage financing, you might assume the mortgage with the lowest rate is the best option. This isn’t always the case. When considering a mortgage, your goal should be to find the mortgage that will cost you the least amount of money over the total length of the mortgage. There are many factors to consider, such as your specific financial situation, the rate, initial term length, fixed or variable rate structure, amortization, and the penalties incurred should you need to break your mortgage early; the fine print matters. An independent mortgage professional can walk through all these factors with you and will help you find the mortgage that best suits your needs. Sometimes taking a mortgage with a slightly higher rate can make sense if it gives you flexibility down the line or helps you avoid huge payout penalties. Working the numbers with an independent mortgage professional will save you money in the long run instead of just going with what a single lender is offering. Save time by letting an independent mortgage professional find the best mortgage product for you. Let's face it, getting a mortgage can be challenging enough on its own. Everyone’s financial situation is a little different and making sense of lender guidelines is a full-time job in itself. So instead of dealing with multiple lending institutions on your own, when you work with an independent mortgage professional, you submit a single mortgage application that is compared to the lending guidelines of various mortgage lenders. This will save you time as you don’t have to go from bank to bank to ensure you’re getting the best mortgage. Simply put, an independent mortgage professional works for you and has your best interest in mind, while a bank specialist works for the bank and has the bank's best interest in mind. It’s no secret that Canadian banks make a lot of money. It seems every quarter they turn billions of dollars in profit (despite the economic environment). They do this at the expense of their customers by charging as much interest as they can and structuring mortgages to their benefit. It’s all about the alignment of interest. Bank employees work for the bank; the bank pays them to make money for the bank. In contrast, independent mortgage professionals are provincially licensed to work for their clients and are paid a standardized placement or finder’s fee for matching borrowers with lenders. When you work with a single bank, you only have access to the products of that bank. When you work with an independent mortgage professional, you have access to all of the lenders that mortgage professionals have relationships with and all their products. Working with an independent mortgage professional will save you money, time, and provide you with better mortgage options. Plus, you have the added benefit of working with a licensed professional looking out for your best interest, providing you with the best possible advice. If you’d like to know more or to discuss mortgage financing, please connect anytime; it would be a pleasure to work with you.

How to Raise Your Credit Score and Unlock Better Rates

By David Sahibzada • October 14, 2025
Want a Better Credit Score? Here’s What Actually Works Your credit score plays a major role in your ability to qualify for a mortgage—and it directly affects the interest rates and products you’ll be offered. If your goal is to access the best mortgage options on the market, improving your credit is one of the smartest financial moves you can make. Here’s a breakdown of what truly matters—and what you can start doing today to build and maintain a strong credit profile. 1. Always Pay On Time Late payments are the fastest way to damage your credit score—and on-time payments are the most powerful way to boost it. When you borrow money, whether it’s a credit card, car loan, or mortgage, you agree to repay it on a schedule. If you stick to that agreement, lenders reward you with good credit. But if you fall behind, missed payments are reported to credit bureaus and your score takes a hit. A single missed payment over 30 days late can hurt your score. Missed payments beyond 120 days may go to collections—and collections stay on your report for up to six years . Quick tip: Lenders typically report missed payments only if they’re more than 30 days overdue. So if you miss a Friday payment and make it up on Monday, you're probably in the clear—but don't make it a habit. 2. Avoid Taking On Unnecessary Credit Once you have at least two active credit accounts (like a credit card and a car loan), it’s best to pause on applying for more—unless you truly need it. Every time a lender checks your credit, a “hard inquiry” appears on your report. Too many inquiries in a short time can bring your score down slightly. Better idea? If your current lender offers a credit limit increase , take it. Higher available credit (when used responsibly) actually improves your credit utilization ratio, which we’ll get into next. 3. Keep Credit Usage Low How much of your available credit you actually use—also known as credit utilization —is another major factor in your score. Here’s the sweet spot: Aim to use 15–25% of your limit if possible. Never exceed 60% , especially if you plan to apply for a mortgage soon. So, if your credit card limit is $5,000, try to keep your balance under $1,250—and pay it off in full each month. Maxing out your cards or carrying high balances (even if you make the minimum payment) can tank your score. 4. Monitor Your Credit Report About 1 in 5 credit reports contain errors. That’s not a small number—and even a minor mistake could cost you when it’s time to get approved for a mortgage. Check your report at least once a year (or sign up for a monitoring service). Look for: Incorrect balances Accounts you don’t recognize Missed payments you know were paid You can request reports directly from Equifax and TransUnion , Canada’s two national credit bureaus. If something looks off, dispute it right away. 5. Deal with Collections Fast If you spot an account in collections—don’t ignore it. Even small unpaid bills (a leftover phone bill, a missed utility payment) can drag down your score for years. Reach out to the creditor or collection agency and arrange payment as quickly as possible . Once settled, ask for written confirmation and ensure it’s updated on your credit report. 6. Use Your Credit—Don’t Just Hold It Credit cards won’t help your score if you’re not using them. Inactive cards may not report consistently to the credit bureaus—or worse, may be closed due to inactivity. Use your cards at least once every three months. Many people put routine expenses like groceries or gas on their cards and pay them off right away. It’s a simple way to show regular, responsible use. In Summary: Improving your credit score isn’t complicated, but it does take consistency: Pay everything on time Keep balances low Limit new credit applications Monitor your report and handle issues quickly Use your credit regularly Following these principles will steadily increase your creditworthiness—and bring you closer to qualifying for the best mortgage rates available. Ready to review your credit in more detail or start prepping for a mortgage? I’m here to help—reach out anytime!