Variable-rate loan

(redirected from Adjustable-Rate Loan)

Variable-rate loan

Loan made at an interest rate that fluctuates depending on a base interest rate, such as the prime rate or LIBOR.

Variable-Rate Loan

A loan with an interest rate that changes periodically. Generally speaking, a variable rate loan is linked to some major benchmark rate; for example, the interest rate may be stated as "LIBOR + 1%." The loan may or may not have a cap on how much the interest rate can rise or fall, or on how often the interest rate may change. Very often, the initial interest rate for a variable-rate loan is lower than that for a fixed-rate loan. This allows more people to qualify for a loan; however, this kind of loan can be risky because the interest rate (and therefore the monthly payment) can rise unexpectedly. See also: Adjustable-rate mortgage.
References in periodicals archive ?
The Class M-1A in 1997-2, backed by an adjustable-rate loan group, has been upgraded.
For the adjustable-rate loan group, Class AV-1 is rated 'AAA' (Triple-A); Class MV-1 is rated 'AA' (Double-A); Class MV-2 is rated 'A' (Single-A); and Class BV is rated 'BBB' (Triple-B).
The agency lists criteria that lenders must follow and details the results of adjustable-rate loan miscalculations and their effect on banks and consumers.
The Fixed-Rate Loan Group collateralizes classes A-1 through A-5, A-7, M-1 through M-3, and B certificates while the Adjustable-Rate Loan Group collateralizes the class A-6 certificates.
Countrywide's adjustable-rate loan production totaled $0.
42 percent, adjustable-rate loan through Freddie Mac s (Federal Home Loan Mortgage Corporation) CME Program.
HFF worked exclusively on behalf of the borrower, Investcorp, to secure the adjustable-rate loan through J.
However, the traditional one-year adjustable-rate loan was offered by only 52 percent of the lenders that offered ARMs--the lowest share in the 23-year history of the survey.
For example, the first-time buyer index is based in part on a 10 percent down payment, with the purchase financed by an adjustable-rate loan.
In December of 2002, Ragland took out a $300,000 adjustable-rate loan on his home, refinancing the $190,000 he owed from his initial interest-only loan.
The transaction is collateralized by two groups of subprime residential mortgage loans, a fixed-rate loan group and an adjustable-rate loan group.