A mortgage where the interest rate fluctuates with the Bank of Canada prime rate.
Variable rate mortgages in Canada use monthly compounding (unlike fixed rates which use semi-annual). Your rate is typically expressed as prime minus a discount (e.g., prime - 0.50%). When the Bank of Canada changes the overnight rate, your variable rate changes accordingly. Some variable mortgages have fixed payments (the proportion of principal vs interest changes), while others have adjustable payments that change with the rate.
Related terms: Fixed Rate Mortgage | Prime Rate | Bank of Canada Overnight Rate