# What is the technical difference between a VRM and an ARM?

> A VRM (Variable Rate Mortgage) has a variable payment that can change, but the interest rate varies with prime rate movements and payments may remain fixed until a trigger rate is reached, after which negative amortization can occur.

Category: Product Mechanics
Last verified: 2026-04-14
Source: https://ratellow.com/faqs/product-mechanics/what-is-the-technical-difference-between-a-vrm-and-an-arm

## Answer
### Strategic Proof

- ARM (Adjustable Rate Mortgage) payments typically change with prime rate moves, which are influenced by BoC rate changes but do not necessarily change with every BoC move.
- VRM payments generally remain fixed until the trigger rate is reached, after which payments can increase or negative amortization can occur, potentially stalling principal payoff.

## Related guide
- https://ratellow.com/guides/variable-vs-adjustable-rates

## Sources
- Bank of Canada Staff Analytical Note 2025-21 — https://www.bankofcanada.ca/2025/07/staff-analytical-note-2025-21/#Introduction