Locked-In Interest Rate
Also known as a “fixed rate.”
A borrower would want to lock in their interest rate if they believe the rate will increase over the life of the loan. Interest rates will fluctuate over time and for mortgages based on the five and ten year Treasury Note Yields. Higher demand for these notes will result in lower interest rates. A floating rate loan is the opposite of a fixed or locked-in rate.
Investment dictionary. Academic. 2012.
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