Adjustment Frequency
The frequency at which interest rate changes or resets on an adjustable-rate mortgage occur. Different adjustable-rate mortgages have different adjustment frequencies. Typically, the adjustment frequency is once a year, but it can be as often as once a month or as infrequent as once every five years. Investopedia Says:
The lower the rate-adjustment frequency, the lower the financial risk for the borrower. To compensate for lower interest rates in the future - and thus lower margins - the lender will usually expect the borrower to pay a higher initial interest rate before the first reset date. Related Terms:
Adjustable-Rate Mortgage - ARM
Adjustment Index
Fixed Interest Rate Mortgage
Interest Rate
Margin
Mortgage
Mortgage Broker
Negative Amortization
Negative Amortization Loan
Variable Interest Rate |