“Hold-the-payment” is a feature that lenders sometimes offer with their variable rate mortgages.
Generally, if you have a variable-rate mortgage, and prime rate increases, your monthly payments will also increase.
If you’ve got a hold-the-payment feature, your payments would instead remain the same.* (However, the portion paid to interest would increase.)
Hold-the-payment options help people budget better for their mortgage payments and have become very popular.
* If prime rate rose to a point where your monthly mortgage payments were insufficient to pay the interest due, your lender would increase your monthly payments regardless of any hold-the-payment feature.
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Last modified: December 29, 2007
