Trigger rate and trigger point: two different things

On a variable-rate mortgage with a fixed payment, a rate increase does not change what leaves your account. It changes how that payment is split: more of it goes to interest and less to principal. Your balance falls more slowly, and your effective amortization stretches out — quietly, without anything on your statement announcing it.

The trigger rate is where that split reaches its limit. It is the rate at which the entire payment is interest and none of it is principal, and it solves one equation: the balance times the periodic interest rate equals the payment. Nothing about your lender or your contract changes the answer — only your balance, your payment and your payment frequency do, which is why a calculator can tell you it and why the figure moves every time you pay down principal.

The trigger point is a different object entirely: a balance ceiling, commonly the original principal, past which your lender requires you to act — a lump sum, a higher payment, or a conversion to fixed. It comes from your commitment letter and from nowhere else. Lenders that publish one do not agree on what to call it, and public writing uses the two terms interchangeably.

Nothing on a calculator page can derive your trigger point. What a calculator can do — and what this site's does — is compute the rate and then say so about the point, rather than presenting a guess with the authority of an arithmetic result. If a tool shows you a trigger point it worked out from your balance and payment, it has invented a term of your contract.

Passing your trigger rate is also not the same as your balance growing. If you pay more than the contract requires, the rate your payment can actually withstand is higher than the one your lender quotes. You can be past the contractual figure while a voluntary increase covers the gap — the exposure is real, and the balance is not yet growing. Stop the increase and it is, the same month.