Another thing to note is that variable rate mortgages will see their rates increase within a day or two. Mine hasn't gone up yet, but I expect it to increase t

Another thing to note is that variable rate mortgages will see their rates increase within a day or two. Mine hasn't gone up yet, but I expect it to increase tomorrow. This does not necessarily translate to higher payments, instead it just means the mortgage will take a little longer to pay off. To explain a little further: A variable rate mortgage can have fixed payments - every day your mortgage accrues a bit of interest, then when you make the payment it pays off that interest and the remainder pays off the principal. If the interest rate increases that just means that the interest that accrues every day is a bit higher and less of your payment goes against the principal, so it takes longer to pay it off. If the interest rate hits the point (the trigger rate) where your monthly payments no longer cover the interest, then your bank will call and want to increase your payments. In this case, a rate hike will translate to higher payments.