Adjustable rate

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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The move will reduce all variable interest rates for Australian home and residential investment loans by 0.25 percent/annum.
Arrears were 3bp lower over the year, following Australia's improved economic environment and lower standard variable interest rates for owner-occupied lending; the unemployment rate was 30bp lower while underemployment dropped by 40bp from 3Q17, falling to 5.0% and 8.6%, respectively.
Most other variable rates -- There are several other forms of consumer debt that come with variable interest rates, and if they're tied to either the U.S.
If the mortgage deed states about variable interest rate then the bank may apply variable interest rates as mentioned in the mortgage deed.
Discussing the Baltics, Nouy warned that the growth in commercial property price posed a risk, as did the use of variable interest rates since there was no guarantee wages or profits would rise in tandem with rates.
"The measures we are introducing [on Thursday] will require lenders to be more transparent with borrowers about how they set their variable interest rates, including in the event of an increase.
Also, in February 2015, Nya SFF issued bonds totalling SEK2,025m with a duration of between two and five years, at both fixed and variable interest rates.
Experts told PAGE that reduction in interest rate is welcoming but it cannot be a driving force of consumer finance once again specially car financing house financing person loans and other electrical appliances because high spread and variable interest rates on loans seem to set an obstacle for such financing.
Accounting for "plain vanilla" interest rate swaps, which are used to convert variable interest rates on loans to fixed interest rates, and vice versa, as referenced in ASC Topic 815, Derivatives and Hedging (formerly FAS 133).
Borrowings will be at variable interest rates, with the current interest rate under the ABL at 4.5%.
The report addressed the ways bank cards fell short and the way credit union cards were better on a number of different points, including interest rates, fees and the way the banks and two credit unions had begun to implement variable interest rates.

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