Related Words

Interest Rate: The percentage rate at which interest is charged on a loan or paid on savings etc.

Interest: The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal; the rate is dependent upon the time value of money, the c . . . View Full Definition

Interest Cap: The maximum interest rate increase of an Adjustable Mortgage Loan. For example: a 120% loan with a 5% interest rate cap would have maximum interest for the life of the loan which would not e . . . View Full Definition

Forward Rate Agreement (FRA): A projection of future interest rates calculated from either spot rates or the yield curve.

Floating-Rate Preferred: In an interest rate swap, the counterparty who pays a rate based on a reference rate, usually in exchange for a fixed-rate payment.

Floating-Rate Payer: Note whose interest payment varies with short-term interest rates.

Interest Coverage Ratio: The interest rate, such as prime or LIBOR, that is used as a reference point for quoting borrowing rates. For example, using the prime rate as the interest basis, a loan might be offered at . . . View Full Definition

Interest Factor: In a table, numbers derived from formulas used to determine the present or future value of money. Interest factors are a function of interest rate and time, and can be derived for any combin . . . View Full Definition

Interest Rate Futures Contract: An interest rate agreement in which payments are made when the reference rate falls below the strike rate. Related: Interest rate cap.

Interest Rate On Debt: A futures contract based on an interbank deposit rate or an underlying debt security. The value of the contract rises and falls inversely to changes in interest rates.