Overnight rate (Ofer Abarbanel online library)

The overnight rate is generally the interest rate that large banks use to borrow and lend from one another in the overnight market. In some countries (the United States of America, for example), the overnight rate may be the rate targeted by the central bank to influence monetary policy. In most countries, the central bank is also a participant on the overnight lending market, and will lend or borrow money to some group of banks. Continue reading “Overnight rate (Ofer Abarbanel online library)”

Adjustable-rate mortgage (Ofer Abarbanel online library)

variable-rate mortgageadjustable-rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.[1] The loan may be offered at the lender’s standard variable rate/base rate. There may be a direct and legally defined link to the underlying index, but where the lender offers no specific link to the underlying market or index the rate can be changed at the lender’s discretion. The term “variable-rate mortgage” is most common outside the United States, whilst in the United States, “adjustable-rate mortgage” is most common, and implies a mortgage regulated by the Federal government,[2] with caps on charges. In many countries, adjustable rate mortgages are the norm, and in such places, may simply be referred to as mortgages. Continue reading “Adjustable-rate mortgage (Ofer Abarbanel online library)”

Prime rate (Ofer Abarbanel online library)

prime rate or prime lending rate is an interest rate used by banks, usually the interest rate at which banks lend to favoured customers—i.e., those with good credit. Some variable interest rates may be expressed as a percentage above or below prime rate. Continue reading “Prime rate (Ofer Abarbanel online library)”