Adjustable rate

(redirected from Adjustable-Rate)

Adjustable rate

Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. Typically, such issues have a set floor or ceiling, called caps and collars that limits the adjustment.

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.
References in periodicals archive ?
Morgan Mortgage Trust 2019-HYB1 (JPMMT 2019-HYB1) is a prime RMBS transaction comprising 703 hybrid adjustable-rate mortgages (ARMs) with an aggregate principal balance of $557.5 million as of the August 1, 2019 cut-off date.
The net proceeds from the offering will be used by the company to finance on a leveraged basis purchases of additional agency-guaranteed pass-through securities backed by adjustable-rate residential mortgages, or ARM loans, and for general corporate purposes.
These are as follows:-- New York City Municipal Water Finance Authority (NY) adjustable-rate water & sewer system revenue bonds series 2008 BB-3; --New York City Municipal Water Finance Authority (NY) adjustable-rate water & sewer system revenue bonds series 2008 BB-4; and -- New York City Municipal Water Finance Authority (NY) adjustable-rate water & sewer system second general resolution revenue bonds series fiscal 2016AA-3.
* Favor a fixed-rate mortgage over an adjustable-rate one.
Summary: It is expected that monthly payments on credit cards, adjustable-rate mortgages and home equity lines may go upwards
high-balance, seven-year adjustable-rate loan programs (agency
* $34 million adjustable-rate commercial mortgage to refinance a multifamily housing property with 178 residential units in a 161,225-square-foot building in Secaucus, N.J.
HFF worked exclusively on behalf of the owner to secure the seven-year, 2.42 percent, adjustable-rate loan through Freddie Mac s (Federal Home Loan Mortgage Corporation) CME Program.
The pricing of interest rate caps and consumer choice in the market for adjustable-rate mortgages.
Five-year Treasury-indexed hybrid adjustable-rate mortgages, or ARMs, fell to 2.80 percent from 2.84 percent in the previous week.