Mortgage · Variable rate
Mortgage trigger rate calculator.
On a variable-rate mortgage with fixed payments, a rising rate pushes more of each payment into interest. Enter your balance, payment and rate to find the rate at which none of your payment reduces the principal.
The trigger rate here is the rate where one month's interest equals your fixed payment. Above it, your balance grows instead of shrinking. Your lender's contractual trigger point, which usually forces a payment increase, is written in your mortgage contract and can differ.
Inputs
Your trigger rate
Fill the form and press Calculate.
How fixed payments on a variable-rate mortgage work
With a fixed payment, your payment stays the same when your rate changes. FCAC explains: "If the interest rate goes up, more of your payment goes towards the interest, and less to the principal. If the interest rate goes down, more of your payment goes towards to the principal." It also warns that you "could end up in a situation where none of your payment goes toward paying down the principal," and the total you owe increases.
That point is what this tool solves for. One month's interest is balance × monthly rate. Set that equal to your payment and the monthly rate is payment ÷ balance, which converts to the annual trigger rate. The trigger balance is payment ÷ monthly rate: the balance below which your payment covers interest at your current rate.
Trigger rate versus your lender's trigger point
FCAC says lenders may raise your payment when rates reach a "trigger point" so you still pay off the mortgage by the end of the amortization period, and that the trigger point is listed in your mortgage contract. This tool does not know your contract. It shows the mathematical zero-principal rate, which is a floor on how bad things get before negative amortization, not a prediction of when your lender will act.
Sources, read 29 September 2026: canada.ca / FCAC "Interest on mortgages" (fixed payments with a variable interest rate; trigger point); Interest Act, R.S.C. 1985, c. I-15, s. 6 (rate calculated yearly or half-yearly). The formulas are plain algebra.
Frequently asked questions
What happens if my rate is above the trigger rate?
Your payment is smaller than the month's interest, so the balance grows each month. FCAC says to contact your financial institution as soon as possible to discuss options.
Is this the same as my lender's trigger rate?
Not necessarily. The lender's trigger point is in your contract. This tool finds the rate where your payment exactly equals the interest.
Why is the remaining amortization "never"?
If your payment does not exceed one month's interest at your current rate, the balance never reaches zero at that rate. Lower the rate, raise the payment, or pay down the balance.
Semi-annual or monthly compounding?
Use whichever your contract states. The Interest Act permits a rate calculated yearly or half-yearly; the choice changes the trigger rate slightly.
Estimate only — confirm with your lender
This tool assumes a constant rate and a constant payment and ignores fees, prepayments and lender-specific rounding. Check your mortgage contract for your actual trigger point and compounding basis.