variable interest rate

Variable interest rate

Adjustable Rate

An interest rate on a loan or convertible security that changes periodically. For example, an adjustable rate mortgage has a certain interest rate that changes with varying frequency. The frequency of the change is called the adjustment rate. Usually, the adjustable rate is set according to some outside benchmark; for example, a loan might set the interest rate at LIBOR + 1%. An advantage of adjustable rate loans is the fact that one's interest rate might fall over time; this is a particular advantage if prevailing interest rates are high at the time of the loan. A disadvantage to adjustable rates is the uncertainty associated with them: one's payments on the loan generally rise or fall.

variable interest rate

A loan interest rate that changes as some outside factor,preferably one not within the control of the lender,changes.Commonly seen in adjustable-rate mortgages.
References in periodicals archive ?
The loan, which aims to fund a road development project, will be repaid over 34 years including a grace period of five years and a half with a variable interest rate not exceeding 1%.
The loan is attracted for 16 years with a 7-year privileged period with the variable interest rate for 6 months LIBOR + variable spread (as of signing date 0.
The loan has a five-year term and a variable interest rate of LIBOR plus a spread of 1.
Citing rising bank funding costs, the bank said that it would hike its standard variable interest rate by 10 basis points to 7.
The facility also provided five-year variable interest rate loans based on 30-day LIBOR totaling approximately $50 million.
The return comes in two flavors: a fixed interest rate set when TIPS are issued and a variable interest rate that tracks inflation.
As a variable interest rate, it could have risen even more, but Democrats and Republicans agreed two years ago to increase it to 6.
Given that some time has passed since we issued our report, the Chairman asked for our perspective on whether economic circumstances--such as current and projected interest rates--are such that a variable interest rate remains a viable option for reducing federal costs of student consolidation loans.
19 per cent discount off standard variable interest rate until March 31, 2006.
The payments on the bond issue will be amortized over a thirty-year period, at a variable interest rate (which is currently 1.
Second, if the rental agreement includes a variable interest rate provision for computing rent due, the $250,000 de minimis ceiling is computed using fixed-rate substitutes under the original issue discount (OID) regulations.
Sainsbury's eight Scots stores will be the first to offer the deal, which features flexible repayments and a variable interest rate starting at 7.

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