ARM (Adjustable Rate Mortgage:

·Payments automatically change and go up/down with the Prime Rate to ensure you maintain the original amortization schedule of the mortgage

·Lender sends out a monthly reminder when payments change

·8 Bank of Canada rate announcements per year

VRM (Variable Rate Mortgage):

·Payments remain fixed for the duration of the term

·Prime down = more of the payment is applied to the principal

·Prime up = more to interest portion

·Amortization period may vary and be longer if rates have risen or be shorter if rates have fallen since the start of the term

·*Every lender hasa different VRM structure

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