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 ?
high-balance, seven-year adjustable-rate loan programs (agency
69-percent, adjustable-rate loan with three years interest only with Freddie Macs (Federal Home Loan Mortgage Corporation) CME Program.
According to public records for the property, Zuckerberg took out a 30-year adjustable-rate loan on his 5.
HFF worked on behalf of Lowe Enterprises, a real estate investment, development and management firm, to secure the five-year, adjustable-rate loan through Wells Fargo Bank.
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 agency lists criteria that lenders must follow and details the results of adjustable-rate loan miscalculations and their effect on banks and consumers.
But the growth of adjustable-rate financing in the past decade has multiplied the possibile configurations a refinancing can have: A homeowner can also move from a fixed-rate loan to an adjustable one, from an adjustable to a fixed, or from one adjustable-rate loan to another.
HFF worked exclusively on behalf of the borrower, Investcorp, to secure the adjustable-rate loan through J.
The 13-year, adjustable-rate loan has an interest rate of 3.
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.
CFA Executive Director Stephen Brobeck says, "Given the high probability of interest rate increases, an adjustable-rate loan made to a family that can barely afford the initial monthly payments represents a ticking time bomb.