Rate Protection

In an adjustable-rate loan, a period of time during which one's interest rate may not rise if prevailing interest rates rise. However, rates may drop in that time period if prevailing interest rates drop. Rate protection is usually extended for 90 or 120 days. See also: Call protection.

Rate Protection

Protection for a borrower against the danger that rates will rise between the time the borrower applies for a loan and the time the loan closes.

Rate protection can take the form of a lock, where the rate and points are frozen at their initial levels until the loan closes, or a floatdown, where the rates and points cannot rise from their initial levels but they can decline if market rates decline. In either case, the protection only runs for a specified period. If the loan is not closed within that period, the protection expires and the borrower will have to either accept the terms quoted by the lender on new loans at that time or start the shopping process anew. See Locking the Loan.

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References in periodicals archive ?

Customers can also take advantage of guaranteed gold rate protection upon 10 per cent advance payment on the jewellery of their dreams till October 17, as well as enjoy low making charges.

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Enhancements will also be made to the Rural or Remote Electricity Rate Protection Program, bringing the total savings up to approximately 20-percent when combined with the rebate program.

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Even more exciting is the gold rate protection guarantee on offer for the duration of the promotion.

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During the last four months, Panda Security has obtained the best rate protection in the Real World Protection Test by Av-Comparatives.

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ADEP's physical asset backed financing with capital and profit rate protection features from Global 'A' rated banks, compelling risk adjusted yields, originated from the world's largest beef exporting nation and food processing companies, does provide the Shari'ah conscious Gulf investor with a genuine real economy alternative".

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Another PS850million has been earmarked to cover claims for mis-selling complex interest rate protection products to small firms.

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These loans provide a nine year term with incremental fixed step ups in rates as well as flexible prepayment penalties which provide the perfect hybrid borrowers are seeking through their long term fixed rate protection and amortization as well as the ability to prepay or refinance if market conditions warrant.

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CIOs intend to increase allocations to assets that offer higher total return potential, interest rate protection and/or an illiquidity premium, including equities, bank loans, real estate, commercial mortgage loans and private equity.

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47bn, which Wireless said it intends to use to repay the outstanding amounts owed under its existing senior secured credit facility, to pay liabilities under related interest rate protection agreements, and to pay related fees and expenses.

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Many banks have mis-sold interest rate protection to thousands of small businesses and compensation could cost billions.

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BANKS are being put under pressure to speed-up compensating the scores of businesses in Wales thought to be struggling as a result of mis-sold interest rate protection products.