Also found in: Acronyms.
Reduction-Option Loan (ROL)
A mortgage loan that combines aspects of fixed-rate and adjustable-rate mortgages. A reduction-option loan is a fixed-rate mortgage, but the rate may drop if prevailing interest rates drop more than a certain amount in a year. Usually, this reduction must be 2% or more. If that happens, the new, lower interest rate becomes the interest rate for the remainder of the mortgage.