Adjustable rate or Variable rate definition

Adjustable rate or Variable rate is a loan (usually a mortgage) that has an interest rate that can go up or down depending on moves in Prime interest rate. If Prime interest rate moves up, Adjustable rate loan interest rate will move up (and therefore the payment amount on this loan will become more). If Prime interest rate moves down, Adjustable rate loan interest rate will move down (and therefore the payment amount on this loan will become less).

Adjustable rate loan is the opposite of Fixed rate loan.

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