Reset Rate

Filed Under »
Dictionary Says

Definition of 'Reset Rate'

The new percentage of interest that a mortgagor must pay on the principal of an adjustable rate mortgage when the reset date arrives and the prescheduled interest rate change goes into effect. The mortgage contract explains when the rate resets and how the new rate is calculated. When the rate resets, the new interest rate may be higher or lower than the initial interest rate depending on market conditions.
Investopedia Says

Investopedia explains 'Reset Rate'

Adjustable rate mortgages have a fixed interest rate for an initial period that commonly ranges from one to five years. When this period ends, the interest rate is reset based on a market rate of interest using a benchmark such as the rate of one-year Treasury bonds or the London Interbank Offered Rate. The lender adds an additional percentage to that benchmark rate. The margin rate does not change, but the market rate does.
Search results for

'Reset Rate'

  • Rate Freeze To Cool Mortgage Meltdown

    http://www.investopedia.com/articles/07/rate-freeze.asp
    ... plan. Pros: The obvious benefit of the rate freeze plan is for subprime
    borrowers who are facing an interest rate reset in 2008. This ...

  • Auction Rate Securities: Bidding On The Long Run

    http://www.investopedia.com/articles/bonds/08/auction-rate-securities.asp
    ... desired bid. Trading Auction Rate Securities Auctions occur fairly often,
    allowing rates to be reset every 7, 14, 28 or 35 days. Each ...

  • This ARM Has Teeth

    http://www.investopedia.com/articles/pf/07/arm-reset.asp
    ... If you decide to go the ARM route, especially the option ARM, you can do several
    things to minimize the pain that will occur when the rate and payment reset. ...

  • CFA Level 1 Study Guide - Derivatives - Interest Rate Caps and ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/interest-rate-caps-floors.asp
    ... 2.6 Net Present Value and the Internal Rate of Return; 2.7 Money Vs. ... 11.10 Payback
    Period; 11.11 Net Present Value (NPV) and the Internal Rate of Return (IRR); ...

  • Auction Rate Securities Still Plague The Market

    http://stocks.investopedia.com/stock-analysis/2009/Auction-Rate-Securities-Still-Plague-The-Market-BBBY-JBLU-LSCC0520.aspx
    ... They have a long-term maturity date, but they pay an interest rate that resets on
    a ... the early days of the financial crisis, when it was time to reset the yields ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Pricing Bonds ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/pricing-bonds.asp
    ... 2.6 Net Present Value and the Internal Rate of Return; 2.7 Money Vs. ... 11.10 Payback
    Period; 11.11 Net Present Value (NPV) and the Internal Rate of Return (IRR); ...

  • How Companies Use Derivatives To Hedge Risk

    http://www.investopedia.com/articles/stocks/04/122204.asp
    ... its bonds. (For example, a common arrangement would be to pay LIBOR plus
    something and to reset the rate every six months). We can ...

  • Hewlett-Packard Presses The Reset Button

    http://stocks.investopedia.com/stock-analysis/2011/Hewlett-Packard-Presses-The-Reset-Button-HPQ-AAPL-ORCL-IBM-DELL-EMC-CAJ-LXK1124.aspx
    ... Hewlett-Packard Presses The Reset Button. Posted ... Rate this Article: Your Rating:
    Overall Rating: Vote Now! Related Links. Marketplace. Related ...

  • Has Greif Reset Expectations?

    http://stocks.investopedia.com/stock-analysis/2011/Has-Greif-Reset-Expectations-GEF-BLL-IP-SI1213.aspx
    ... Has Greif Reset Expectations? Posted ... Rate this Article: Your Rating: Overall
    Rating: Vote Now! Related Links. Marketplace. Related ...

  • What is a subprime mortgage?

    http://www.investopedia.com/ask/answers/07/subprime-mortgage.asp
    ... ARMs are somewhat misleading to subprime borrowers in that the borrowers initially
    pay a lower interest rate. When their mortgages reset to the higher ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links