Adjustable rate mortgage Meaning and Definition
Adjustable rate mortgage
Pronunciation
/ˌædʒʌstˈreɪt ˈmɔrɡɪdʒ/
Part of Speech
Noun
Definition
A type of home loan where the interest rate can change periodically based on a specific financial index, such as the prime rate or the London Interbank Offered Rate (LIBOR).
Examples
- The couple opted for an adjustable rate mortgage to save money on their initial mortgage payments.
- The bank offered an adjustable rate mortgage with a low starting interest rate, but warned the borrower about potential future rate increases.
Synonyms
- VARIABLE rate mortgage
- Floating rate mortgage
Antonyms
- Fixed rate mortgage
- Conventional mortgage
Etymology
The term “adjustable rate mortgage” originated in the 1970s as a response to the fluctuating interest rates during that period.
Usage Notes
In typical usage, “adjustable rate mortgage” is used to refer to a mortgage with an interest rate that can change over time.
Cultural References
The term has been mentioned in various financial news outlets, such as The New York Times and Forbes, as well as in popular TV shows like “The Profit” and “This Old House.”
Idiomatic Expressions or Phrases
None found.
Related Words or Phrases
Fixed rate mortgage, variable rate mortgage, floating rate mortgage, conventional mortgage, mortgage rate, interest rate.
Collocations
Adjustable rate mortgage and interest rate, adjustable rate mortgage and fixed rate mortgage, adjustable rate mortgage and variable rate mortgage.
Frequency of Use
The term “adjustable rate mortgage” is commonly used in financial and economic contexts, particularly in the United States.
Common Misspellings
Adjastable, Adjast rate mortgage, Adjast mortgage, Adjustable rate mortage