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Canadian Rollover Mortgage

Home Ownership by Country


What is 'Canadian Rollover Mortgage'

A home mortgage with an adjustable rate feature. The Canadian Rollover mortgage differs from a 30-year fixed rate mortgage, in that the loan's interest rate is adjusted every five years, with no cap on the interest rate adjustment. The Canadian Rollover Mortgage is also known as a Variable Rate Mortgage or a Renegotiable Rate Mortgage.

Explaining 'Canadian Rollover Mortgage'

The Canadian Rollover Mortgage is called such as it is the standard mortgage in Canada. Adjustable Rate Mortgages (ARM's) in the U.S. are usually linked to an index such as the Consumer Price Index (CPI) and adjust every year after a lock-out period (usually 3, 5, or 7 years). The rate on the Canadian Rollover Mortgage is actually renegotiated, typically once every five years.

Canadian Rollover Mortgages are one kind of rollover mortgage. Other mortgages that belong to this group are the aforementioned ARM, the variable rate mortgage, and the renegotiable rate mortgage. All of these mortgages were developed, in part, to allow a larger group of borrowers to participate in the housing market. When real estate gets too expensive for borrowers (either due to price appreciation or high interest rates) mortgage providers get creative with mortgage structures to entice people to borrow.


Further Reading


Mortgage borrower repayment behavior: a microeconomic analysis with Canadian adjustable rate mortgage dataMortgage borrower repayment behavior: a microeconomic analysis with Canadian adjustable rate mortgage data
onlinelibrary.wiley.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

Adjustable‐Rate Mortgages, Economic Fluctuations, and Lender Portfolio ChangeAdjustable‐Rate Mortgages, Economic Fluctuations, and Lender Portfolio Change
onlinelibrary.wiley.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

Mortgage Rate Insurance and the Canadian Mortgage MarketMortgage Rate Insurance and the Canadian Mortgage Market
www.jstor.org [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

Instrument choice: The demand for mortgages in CanadaInstrument choice: The demand for mortgages in Canada
www.sciencedirect.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

Consumer Default of Delinquent Adjustable‐Rate Mortgage LoansConsumer Default of Delinquent Adjustable‐Rate Mortgage Loans
onlinelibrary.wiley.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

Financing social housing in CanadaFinancing social housing in Canada
www.tandfonline.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

International comparison of mortgage product offeringsInternational comparison of mortgage product offerings
papers.ssrn.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …

A comparison of US and Canadian residential mortgage marketsA comparison of US and Canadian residential mortgage markets
www.emerald.com [PDF]
… Tim Campbell, David Northrup, Robert Paysour, Michael Phelan, Leonard Stefanski, Robert Weagley, and the staff ofa Canadian trust company who … and mortgage interest payments are not tax deductible (both of which are the case in Canada), and (5) rollover periods are …



Q&A About Canadian Rollover Mortgage


What is a Canadian Rollover Mortgage?

A Canadian Rollover Mortgage is a mortgage with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.

What are some common indices used in Canada for adjustable-rate mortgages?

The rates on one-year constant maturity Treasury (CMT) securities, COFI and LIBOR.

Are there any lenders who use their own cost of funds as an index rather than using these indices?

Yes, some lenders do this.

Why would someone choose this mortgage over another type of mortgage?

Someone may choose this because they do not want to be locked into one interest rate for too long, or they want to take advantage of lower rates when they are available.

When do you renegotiate your loan?

You renegotiate your loan every five years.

What are some other names for the Canadian Rollover Mortgage?

Some other names for the Canadian Rollover include Variable Rate Mortgage and Renegotiable Rate Mortgage.