Variable Rate Program

• Product Features
• Energy-Efficient Housing Program
• Extended Amortization Program
• Portability Feature
• Purchase Plus Improvements Program
• Self-Directed RRSP Program
• Variable Rate Program

Variable interest rates are generally tied to the bank's prime lending rate and typically will fluctuate with prime. Genworth allows the following variable rates with no additional premium surcharge:

Standard Variable Rate Mortgage (standard VRM)

• Fluctuating interest rate with a constant payment during the term
• Standard VRM's may not be available on all Genworth Programs. Please refer to specific Genworth Product Overviews for eligibility
• The loan payment must be recalculated at least every 5 years to ensure the mortgage conforms to the original amortization schedule.
• For applicable standard VRM trigger points click here

Capped Variable Rate Mortgage (capped VRM)  

• A constant payment during the term that is set at the capped rate, with an interest rate that fluctuates, but only up to the capped rate.

 Adjustable Rate Mortgage (ARM)

• Both the interest rate and payment vary concurrently during the term subject to two options:
  • Option A) The mortgage payment is adjusted to cover both principal and interest to maintain the original amortization schedule when the interest rate increases; or
  • Option B) The mortgage payment is adjusted to ensure the interest is paid when the interest rate increases until the term renewal (at least every 5 years) at which point the payment is adjusted to maintain the original amortization schedule.

Trigger points

• For a standard non-capped VRM, the designated amount (trigger point) is 105% of the original gross principal amount. If the loan amount exceeds the designated amount as described above, we offer the mortgagor the following options:
  • Increase the amount of each regular payment under the mortgage in order to amortize the mortgage over the remaining amortization period 
  • Reduce the total amount of the loan amount then owing by making a lump sum payment to reduce the total amount to a point below the designated amount
  • Convert the mortgage to a fixed rate mortgage with equal monthly payments
• For a capped VRM, the principal and interest payments are either calculated at the capped rate or at the contract rate (with the principal and interest payments being recalculated whenever the interest rate changes). This ensures the loan will amortize over the agreed term.
• In the event of default, the mortgage must be converted to a fixed rate mortgage. Once remedied, the VRM status can be re-instated.