Rate Index
Definition
- A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes for adjustable-rate mortgages and other variable-rate loans.
Synonyms
adjustable-rate mortgage index, yield index
Related Terms and Acronyms
- Adjustment Period — Definition,
- The time between changes in the interest rate in an adjustable-rate mortgage.
- Consumer Price Index (CPI) — Acronym, Important,
- An index that measures movements in the average price of products and services typically consumed by Canadian families.
- Index — Definition,
- A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes.
- Interest Rate Cap — Definition,
- A limit to the interest rate increases and decreases on an adjustable rate loan; either from one adjustment period to the next or over the life of the loan.
- Payment Cap — Definition,
- A contractual limit on the size of the monthly payment of an adjustable-rate mortgage or other variable rate loan.
- Spread — Definition,
- The difference between the interest rate charged to borrowers and the interest rate paid to depositors.
- Variable Interest Rate — Definition,
- Percentage that a borrower pays for the use of money, and which moves up or down periodically based on changes in other interest rates.
- Variable Rate — Definition,
- A floating percentage value that fluctuates based on certain conditions.
- Variable Rate Mortgage (VRM) — Acronym, Very Important,
- Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
➥ A type of mortgage loan offered by brokers and lenders.
