Reset frequency

Reset frequency

The frequency with which the floating rate changes.

Reset Frequency

In adjustable-rate loans, the rate at which changes to a loan's interest rate occur. Sometimes, the interest rate changes once a year, but some loans change interest rates as often as once a month or as seldom as every five years. The higher the reset frequency, the higher the financial risk for the homeowner. For example, if the reset frequency is once a month, a homeowner could find his/her mortgage payment increasing every month for five months before it goes down again. This ties up more of the homeowner's income and increases the likelihood of default.
References in periodicals archive ?
Basis and Interest Rate Risk for OSLA 2010A: Basis risk for this transaction arises from any rate and reset frequency mismatch between interest rate indices for SAP and the securities.
Basis and Interest Rate Risk for OSLA 2011-1: Basis risk for this transaction arises from any rate and reset frequency mismatch between interest rate indices for SAP and the securities.
After the sampling period (loan) rate reset frequency damping frequency of capital and the crediting of interest type of capital depreciationannualquinquennialdecadalAnnual fixed for capitalSix months for the progressive interest groups (like constant annuities)Pursuant to Article 54 of the Royal Decree of 8.
5 per cent above the base rate prevailing at the time of reset, with a reset frequency of five years.
The formulas have several variables, including interest rates, reset frequency and the portfolio yield.
Basis and Interest Rate Risk: Basis risk for these transactions arises from any rate and reset frequency mismatch between interest rate indices for SAP and the securities.
One category contains the same duration and same rate reset frequency funding.
Basis and Interest Rate Risk: Basis risk for this transaction arises from any rate and reset frequency mismatch between interest rate indices for SAP and the securities.
A class contains the same length and the same rate reset frequency funding.
category contains the same length and same period rate reset frequency funding.