The article may contain affiliate links from partners. The words, opinions, and reviews are our own. Learn how we make money to support our financial wellness mission.
A variable rate is any interest rate that changes on a periodic basis. Variable rates are often used for convertibles, mortgages, private student loans, and certain other kinds of loans. The change is usually tied to the movement of an outside indicator, such as the prime interest rate. Movement above or below certain levels is often prevented by a predetermined floor and ceiling for a given rate.
