Rate Protection

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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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Under the Commission's current regulations, KMIGT would be required to file as many as 30 separate applications, plus amendments, for a series of relatively minor system expansions, which would not have a significant effect on the environment or on existing customers, because of the environmental and rate protections applicable to blanket certificated facilities," explained Bentley W.
The people of the Valley got their assets and got rate protections.
Those rate protections benefit not only residential customers, but government and commercial customers as well.