Reset Date

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DEFINITION of 'Reset Date'

The point in time when the initial fixed interest rate on an adjustable rate mortgage changes to an adjustable rate. This date is commonly one to five years from the start date of the mortgage. After the initial reset date, the interest rate will continue to reset as often as once a month.

INVESTOPEDIA EXPLAINS 'Reset Date'

The new interest rate calculated on the reset date will be based on an index value such as the interest rate of one-year Treasury bonds or the London Interbank Offered Rate. This rate fluctuates as market conditions change. The other component of the interest rate in an adjustable rate mortgage is the lender's margin, which does not change during the life of the loan.



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