What Are Trigger Rates? Do You Have One and Do You Know What It Is?
By Jason Scott · Published December 5, 2022
What are trigger rates? Do you have a trigger rate? Well, a trigger rate is for people who have variable rate mortgages. So a little bit of background: there are two types of floating rate mortgages. There are adjustable rate mortgages, where your payment changes either up or down depending on interest rate changes or a variable rate mortgage and that’s a mortgage where your payment stays the same. And if your interest rate goes up or down, more or less money goes towards interest versus paying down the principle. So we’ve had three-and-a-half percent worth of rate hikes so far this year. And if you have a variable rate mortgage you may be hitting-you probably are hitting-your trigger rate. Which sounds really scary and it can be scary, actually. So here’s what will happen, and here’s what you need to know:
Hope this help you understand what trigger rates are! I have a great video on “what are rate holds” too.
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