fixed interest rate definition
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Fixed interest rate loan (June 2007). A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate period of the loan. This allows the borrower to accurately predict their future payments. Variable rate loans, by contrast, are anchored to the prevailing discount rate. A fixed interest rate is based on the lender's assumptions about the average discount rate over the fixed rate period. For example, when the discount rate is historically low, fixed rates are normally higher than variable rates because interest rates are more likely to rise during the fixed rate period.
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Adjustable-Rate Mortgages Adjustable-Rate Mortgages. An “adjustable-rate mortgage” is a loan program with a variable interest rate that can change throughout the life of the loan. It differs from a fixed-rate mortgage, as the rate may move both up or down depending on the direction of the index it is associated with.
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Fixed interest rate loan This differs from a variable rate loan, where the capital value is always the original loan less any capital repayments. This can lead to counter-intuitive results. For example, a 15 year fixed rate loan of £100,000 taken out at the middle of 2011 would have had a capital value of around £115,000 at the middle of 2013.
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- Variable Rates. 1  Variable-rate student loans have interest rates that can change during the repayment period. 2  A fixed-rate student loan guarantees a single interest rate that does not change over the lifetime of the loan.  3 Term refers to the length of the loan, typically in years.
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Mortgage loan In a fixed rate mortgage, the interest rate, remains fixed for the life (or term) of the loan. In case of an annuity repayment scheme, the periodic payment remains the same amount throughout the loan. In case of linear payback, the periodic payment will gradually decrease.
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fixed cost fixed cost. A periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance, interest, rent, salaries, and wages. While in practice, all costs vary over time and no cost is a purely fixed cost, the concept of fixed costs is necessary in short term cost accounting.
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- Fixed Cost. Definition: A fixed cost is a cost that does not vary in the short term, irrespective of changes in production or sales levels, or other measures of activity.
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Liberty Street Economics Investors simply pay more for the securities at purchase than the securities promise to pay at maturity. The reduction in nominal value over the life of an instrument reflects the negative yield on the instrument. Interest-bearing securities, like fixed-rate bonds and floating rate notes, are a different matter. Because a marketable note or bond can be widely dispersed among many holders and held in relatively small amounts, it would be challenging to directly collect periodic interest payments from holders.
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- About Thirty Year Mortgage Rate. The contract interest rate on commitments for 30 year, fixed-rate mortgages. Relatively low interest rates gives homeowners and home buyers additional flexibility to buy or refinance at lower interest rates. Read full definition.
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- DEFINITION of 'Fixed Exchange Rate'. A country's exchange rate regime under which the government or central bank ties the official exchange rate to another country's currency (or the price of gold). The purpose of a fixed exchange rate system is to maintain a country's currency value within a very narrow band.
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Floating interest rate Floating interest rate. A floating interest rate, also known as a variable or adjustable rate, refers to any type of debt instrument, such as a loan, bond, mortgage, or credit, that does not have a fixed rate of interest over the life of the instrument. Floating interest rates typically change based on a reference rate. One of the most common reference rates to use as the basis for applying floating interest rates is the London Inter-bank Offered Rate, or LIBOR. The rate for such debt will usually be referred to as a s
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ARCHIVED - Canada Health Act Annual Report 2009-2010 View interest rates. Fees and charges are payable. View ANZ Business Banking terms, conditions, fees and charges. Interest types. 1  Variable rate (up to 15 years). 2  Fixed rate, interest in arrears (up to 10 years). 3  Fixed rate, interest in advance (up to five years).epayment options. Principal and interest or interest only (available up to a maximum term of five years) and a lump sum balloon payment up to 80% of loan amount at end of loan term.
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- However, this cut in rates is going to affect interest rates of fixed deposits. It will bring down the annual interest income on fixed deposits. However, individuals who invest in fixed deposits now for a long tenure will be able to earn a high rate of interest.ndhra Bank has reduced interest rates on fixed maturities ranging above one year by upto 75 bps, while Bank of India (BOI) have cut rates by 15 bps to arrive at 8.9% for maturities that range in the 1-2 years bracket.
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Evaluating the bank's offer (FRM vs. ARM) On a normal mortgage the interest rate stays the same over the life of the mortgage. This is called a fixed-rate mortgage, or FRM. If interest rates are low then your lender will try to sell you on an adjustable rate mortgage, or ARM, where the interest rate varies over the life of the loan.
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Interest Rates The formula for simple interest is I = prt where I is the simple interest, p is the principal, r is the rate of interest, and t is the period of time.
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Dictionary of Banking Terms and Phrases Also known as variable-rate mortgages. The initial interest rate is usually below that of conventional fixed-rate loans. The interest rate may change over the life of the loan as market conditions change. There is typically a maximum (or ceiling) and a minimum (or floor) defined in the loan agreement. If interest rates rise, so does the loan payment. If interest rates fall, the loan payment may as well.
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Fixed rate bond The coupon rate attached to the fixed-rate bond is payable at specified dates before the bond reaches maturity; the coupon rate and the fixed-payments are delivered periodically to the investor at a percentage rate of the bond’s face value.
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What is 'Interest Rate' DEFINITION of 'Interest Rate'. The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). The assets borrowed could include, cash, consumer goods, large assets, such as a vehicle or building. Interest is essentially a rental, or leasing charge to the borrower, for the asset's use.
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Advantages of fixed exchange rates A fixed exchange rate occurs when a country tries to keep the value of its currency at a certain level against another currency. Often countries join a semi-fixed exchange rate, where the currency can fluctuate within a small target level.
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- 1 Fixed Rate: An annual percentage rate that does not change.  Variable Rate: An interest rate that is directly correlated to an underlying interest rate index, moving up or down along with it.
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Mortgage loan 1 In a fixed rate mortgage, the interest rate, remains fixed for the life (or term) of the loan. 2  In case of an annuity repayment scheme, the periodic payment remains the same amount throughout the loan. 3  In case of linear payback, the periodic payment will gradually decrease.
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Fixed Period Option Fixed Period Option. An option for paying the proceeds of a life insurance policy to beneficiaries whereby the insured chooses the dollar amount of the benefit payment. This fixed amount is paid periodically until the entire proceeds are exhausted. Interest, at a minimum guaranteed rate, is added to the proceeds annually.
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- Know about interest rates. A fixed-rate private education loan. comes with an interest rate that stays the same for the entire. term of the loan, no matter how other (market) interest rates. perform. This means that your payments will not change due. to interest rate fluctuations during your repayment period.
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Mortgage Basics: Variable-Rate Mortgages By Lisa Smith A variable-rate mortgage, also commonly referred to as an adjustable-rate mortgage or a floating-rate mortgage, is a loan in which the rate of interest is subject to change.
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- What is a 'Variable Interest Rate'. A variable interest rate is an interest rate on a loan or security that fluctuates over time, because it is based on an underlying benchmark interest rate or index that changes periodically.
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Fixed vs. Variable Rate Loans What is the definition of a Variable Rate Loan? Variable rate loans are loans that have an interest rate that will fluctuate over time in line with prevailing interest rates. They generally have lower starting interest rates than fixed rate loans, but the interest rate and payment amounts can change over time. Sometimes they are also known as floating rate loans.