A variable-rate mortgage: by what timeframe must the lender notify the borrower of a rate change?

• A. as soon as the bank becomes aware that they are changing the interest rate.
• B. no later than 10 business days following a change in the ECB refi rate.
• C. at least 20 business days in advance of any interest rate change.
• D. at least 30 days in advance of any interest rate change.

Answer: (D)

Lenders must provide advance notice before changing the rate on a variable-rate mortgage. The required lead time is at least 30 days in advance of any interest rate change. This gives borrowers enough time to review the new payment, adjust their budget, and consider options like refinancing or negotiating terms. Shorter notice periods—such as notifying only when they become aware of a change, or 10 or 20 days—do not give borrowers sufficient time to respond and can create payment difficulties. The 30-day requirement stands regardless of any external benchmark changes, and isn’t tied to a specific rate like the ECB refi rate.