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How far can rates rise before your payment stops covering interest?
For a variable-rate mortgage with a fixed payment: your trigger rate, the headroom left before it, and what paying a little more each month would buy you.
Anything you pay above the contractual amount. Leave at 0 if you pay exactly what the contract says.
Where you stand
- Current rate
- 5.45%
- Trigger rate
- 7.034%
- Rate headroom
- 1.58% left
Rates can rise 1.58% before your payment stops covering interest.
The rate and the point are different things, and the names get swapped
On a variable-rate mortgage with a fixed payment, a rising rate does not change what leaves your account — it changes how that payment is split. More goes to interest, less to principal. The trigger rate is where the split reaches its limit and the entire payment is interest.
- The trigger rate is arithmetic
- 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. That is why a calculator can tell you it, and why the figure moves the moment you pay down principal.
- The trigger point is a term in your contract
- It is 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 is not derivable from anything on this page, lenders that publish one do not agree on what to call it, and whatever your commitment letter says is what governs. Anyone showing you a trigger point they calculated is showing you a guess.
- Passing the trigger rate is not the same as your balance growing
- If you pay more than the contract requires, the rate your payment can withstand is higher than the one your lender quotes. Passing the contractual figure while a voluntary increase covers the gap means the exposure is real and the balance is not actually growing — but stop the increase and it is, the same month.
Two different things: the trigger RATE is where your payment stops covering interest and the balance starts growing; the trigger POINT is the balance ceiling your lender will act on. Sources use these terms inconsistently — whatever your commitment letter says is what governs.
What an extra $2,600.00 a month is worth
A $450,000.00 balance at 5.45%, paying $2,600.00. The contractual trigger rate is 7.034%. Paying more raises the rate your payment could survive, and the relationship is close to linear over the range that matters — which makes it unusually easy to decide with.
| Extra per payment | Trigger rate | Headroom |
|---|---|---|
| Contractual payment only | 7.034% | 1.58 |
| + $100.00 | 7.309% | 1.86 |
| + $200.00 | 7.584% | 2.13 |
| + $300.00 | 7.859% | 2.41 |
Headroom is in percentage points, not percent — the amount the rate can rise, not a proportion of it. A voluntary increase you can stop is not a rate hold: stopping it returns you to the contractual figure immediately.
How this is worked out
- The trigger rate solves balance × periodic rate = payment, converted back to an annual nominal rate on a semi-annual compounding basis — the Canadian convention for fixed and variable mortgages alike.
- Your commitment letter, which is the only place your trigger point exists.
- Financial Consumer Agency of Canada guidance on variable-rate mortgages and negative amortization.
Method last reviewed 25 August 2026.
Written by Hermann Gael Nang-SongFounder of LoonieLodge Inc., and author of the Canadian mortgage engine this site runs on.
Educational and informational only — not licensed mortgage, financial, legal or tax advice. Every lender's contract governs its own mortgage, and the figures here are estimates from stated assumptions rather than quotes. Confirm anything you intend to act on with your lender and a licensed professional.
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This page asks what you owe and what you pay. The answer to what happens to those numbers is nothing: the arithmetic runs on this page as you type, and there is no request to send it anywhere.
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The number moves every month
Your trigger rate rises as the balance falls and changes again with every rate move and every extra dollar you pay. An account tracks it against the mortgage you actually hold and tells you when the headroom gets thin, instead of you remembering to come back and retype it.