What is the definition of Floating Interest Rate?
- Posted on November 19, 2019
- Financial Terms
- By admin admin
A floating interest rate is one that is not fixed, but rather is free to float around with whatever the prevailing interest rate is at the time. When two parties agree a loan at a fixed interest rate each one is taking on some interest rate risk. The lender is assuming that interest rates will rise in the future whilst the borrower is expecting interest rates to fall.
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