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Interest Rate Floor

   Also found in: Wikipedia 0.01 sec.
Interest rate floor
An interest rate agreement in which payments are made when the reference rate falls below the strike rate. Related: Interest rate cap.
Interest Rate Floor
The minimum interest rate that may be charged on a contract or agreement. For example, an adjustable-rate mortgage may have an interest rate floor stating that the rate will not go below 3.5% even if the formula used to calculate the interest rate would have it do so. An interest rate floor reduces the risk to the bank or other party receiving the interest. See also: Interest Rate Ceiling.
Interest Rate Floor

The lowest interest rate possible under an ARM contract.

Floors are less common than ceilings. See Adjustable Rate Mortgage (ARM)/How the Interest Rate on an ARM Is Determined.
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Lower interest rates Home loans today pierced the interest rate floor of 8 per cent that the State Bank of India had set in earlier this year.
GRAB THE CHANCE by Mail Today (New Delhi, India)
Survivorship Plus IUL gives policyholders a minimum annual 2% interest rate floor on policy value accumulation that will be credited monthly, a guarantee that the policy cap percentage on potential indexed interest will never be less than 10% and most importantly, a no-lapse death benefit rider that can extend guaranteed protection up to age 121 of the younger insured.
Penn Mutual: Indexed Universal Life by Life Insurance Selling
Rules breach warning LENDERS who impose interest rate floors on tracker mortgages may be breaching regulatory rules if customers were not warned about the issue when they took out the loan, the City watchdog, the Financial Services Authority, told lenders yesterday.
2 DAY IN 2 MINUTES: home and abroad by The Journal (Newcastle, England)
 
 
 
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