Variable Mortgages Definition

variable rate mortgage meaning: a loan for buying a house on which the interest rate can change over time: . Learn more.

A variable rate mortgage often has a lower initial interest rate than a fixed mortgage. With a variable rate mortgage, however, the initial rate changes after a period of time. Once that period is over, the interest rate of a variable rate mortgage rises or falls depending on an index.

Variable-rate mortgage financial definition of variable-rate. – variable-rate mortgage (VRM) A precursor to the modern adjustable-rate home mortgage (arm), and still used in the area of commercial mortgages.With a variable-rate mortgage,the interest rate on the loan changes whenever the index rate changes.

What Does 7 1 Arm Mortgage Mean The "5" in the loan’s name means it’s fixed for five years, and the "1" means it can reset every year after that, within restrictions called "floors" and "caps.". The starting rate for a 5/1 ARM is generally about one percent lower than similar 30-year fixed rates.

Variable rate mortgages typically offer a lower interest rate than fixed rate mortgages. As interest rates decline, you could pay off your mortgage faster and save money on reduced interest costs. Current Variable vs. Fixed Mortgage Rates; Fixed Payments for the Mortgage Term.

With a fixed rate mortgage, the mortgage rate and payment you make each month will stay constant for the term of your mortgage. With a variable rate mortgage, however, the mortgage rate will change with the prime lending rate as set by your lender. Fixed mortgage rates eases budgeting anxiety and offers stability.

By Amy Fontinelle. A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses to make large real estate purchases without paying the entire value of the purchase up front.

Adjustable Interest Rate The present value measurement requires a lease-specific discount rate based on information which may or may not be readily available. Some leases, for example, may indicate their implicit interest.

A variable rate mortgage is a mortgage where the interest rate may change periodically during the term of the mortgage, VARIABLE RATE MORTGAGE : definition of VARIABLE RATE. – definition of Wikipedia. Advertizing . Variable-rate mortgages are the most common form of loan for house purchase in the United Kingdom and Canada but are unpopular in.

And the key variable driving all foreclosures wasn. Subprime peaked at 21% of the total mortgage market while prime — depending on how reliable that definition is– always accounted for 60% or.