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Related to Variable-rate: Variable Rate Loan


A varible-rate agreement, as distinguished from a fixed-rate agreement, calls for an interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. A fluctuation in the rate causes changes in either the payments or the length of the loan term. Limits are often placed on the degree to which the interest rate or the payments can vary.
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 ?
It affirmed the 'F1+' rating on $100 million California Health Facilities Financing Authority (Scripps Health) series 2012B and 2012C variable-rate revenue bonds currently supported by self-liquidity.
Dividends from variable-rate preferred securities also receive preferential tax rates compared to interest income, which makes them particularly attractive for top tax bracket investors,' she added.
Alla Koblyakova of the university's school of design and the built environment said: "As variable-rate mortgages are more sensitive to financial shocks, it's a matter of national economic concern that there is such a geographical imbalance.
In 2004, for example, the spread between The Bond Buyer 20-Year GO Index (fixed-rate average) and The Bond Market Association Swap Index (variable-rate average) was about 3.5 percent.
The Board approved the sale of up to $794.685 million in one or more series of 30-year tax-exempt fixed-and/or variable-rate bonds to be sold in a negotiated sale.
StableFlow is a variable-rate controller and drip tube in one complete, compact unit that integrates an automatic "priming" sequence.
* Company B designates the swap as a cash flow hedge of its variable-rate debt.
Many lenders charge similar standard mortgage rates and often offer incentives to borrowers to get them to take a variable-rate rather than a fixed or capped-rate mortgage.
Under Section 226.19-Certain Residential Mortgage and Variable-Rate Transactions, under 19(b) Certain variable-rate transactions, paragraph 5.
Last month Barclays launched a variable-rate Euro mortgage for UK residents, taking advantage of the relatively low, short-term Euro interest rates of about three per cent.
* The 1994 Retirement Protection Act removed the old $53 variable-rate premium cap for plan years starting between January l and June 30, 1996.
For example, instead of either a fixed- or variable-rate mortgage loan, a mortgage banker may design a combination--a loan with an interest rate that is fixed for anywhere from 3 to 10 years, and is then adjusted annually.

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