Financial glossary
Variable Interest Rate
In plain English
An interest rate that can change over time under the loan agreement, which can make payments rise or fall.
A variable interest rate can change under the loan agreement as an index or benchmark moves. Variable rates make a HELOC or ARM payment less predictable than a fixed-rate loan, so a budget should include a higher-rate scenario. See the HELOC stress test.
Related calculators
- HELOC Payment CalculatorEstimate a HELOC interest-only draw payment and the fully amortizing repayment payment, including the payment jump after the draw period.
- Adjustable-Rate Mortgage CalculatorCompare an adjustable-rate mortgage initial payment with a reset-rate stress case after the fixed period. See the payment change clearly.