What does Variable Interest Rate mean?

A variable interest rate is an interest rate that can change over time. This type of interest rate is often used in adjustable-rate mortgages (ARMs) or other types of loans where the interest rate is not fixed. With a variable interest rate, the interest rate can change based on a variety of factors, such as market conditions or changes in the lender's cost of funds. This means that the monthly payments on a loan with a variable interest rate can change over time, which can make budgeting for the loan more difficult.

Related Terms

Contingency Listing Commencement Date Adjustment Period Contract of Sale Underwriting Amortization Tables New Urbanism Rehabilitation Mortgage Low-Documentation Loan Life-Cycle Cost Analysis Depreciation Setback Subcontractor Interest-Only Loan Cpi and Market Rent Escalation (In a Lease) Graduated-Payment Mortgage (GPM) High Density Community Property