Index Rate
/ˈɪndɛks reɪt/
Definitions
- (n.) A benchmark interest rate used to calculate variable interest rates in financial contracts.
The loan's interest payments vary according to the index rate specified in the agreement.
- (n.) A published reference rate that serves as a standard for adjusting financial instruments, often linked to market conditions or economic indicators.
The mortgage’s interest is adjusted annually based on the prevailing index rate.
Forms
- index rate
- index rates
Related terms
See also
Commentary
Often used in adjustable-rate financial agreements, the index rate must be clearly defined to avoid ambiguity in contractual interest calculations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.