variable interest rate

Variable interest rate

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.

variable interest rate

A loan interest rate that changes as some outside factor,preferably one not within the control of the lender,changes.Commonly seen in adjustable-rate mortgages.
References in periodicals archive ?
The bank also decided to offer a new product for new saving certificates with variable interest rate, according to the corridor rate announced by the Central Bank of Egypt (CBE).
Theloan has a variable interest rate, but Griffin entered into an interest rate swap agreement with People's Bank that effectively fixes the interest rate at 4.
New Central Bank rules to increase consumer protection will make it necessary for lenders to provide a "statement of factors" explaining how they set their variable interest rate.
The loan, which aims to fund a road development project, will be repaid over 34 years including a grace period of five years and a half with a variable interest rate not exceeding 1%.
The loan is attracted for 16 years with a 7-year privileged period with the variable interest rate for 6 months LIBOR + variable spread (as of signing date 0.
The notes have a variable interest rate and a fixed interest rate of 4.
The return comes in two flavors: a fixed interest rate set when TIPS are issued and a variable interest rate that tracks inflation.
Given that some time has passed since we issued our report, the Chairman asked for our perspective on whether economic circumstances--such as current and projected interest rates--are such that a variable interest rate remains a viable option for reducing federal costs of student consolidation loans.
The loan is for a 20-year term with a four-year grace period, at a variable interest rate.
19 per cent discount off standard variable interest rate until March 31, 2006.
The payments on the bond issue will be amortized over a thirty-year period, at a variable interest rate (which is currently 1.

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