Editor Notes: Adjustable (or variable) rate loan have an adjusting interest rate periodically tied (often with an adjustment) to some index. The loan's interest increases or decreases with the index which typically results in a different payment amount; though there are alternatives such as a longer term of the loan.
Seven common indexes in the United States are:
11th District Cost of Funds Index (COFI)
London Interbank Offered Rate (LIBOR)
12-month Treasury Average Index (MTA)
Constant Maturity Treasury (CMT)
National Average Contract Mortgage Rate
Bank Bill Swap Rate (BBSW)
Adjustable rate loans are in contrast to fixed rate loans.
† Examples followed by this mark were not checked by an editor. Please let us know if you spot a problem.