Adjustment Date

Definition - What does Adjustment Date mean?

An adjustment date is the particular day that an adjustable rate mortgage will experience an alteration of the interest rate. Adjustment dates usually occur in regularly scheduled intervals, such as every three years. The purpose of adjustment rates is to keep the interest rate for the mortgage comparable with current interest rates.

Justipedia explains Adjustment Date

Adjustment dates are typically laid out in mortgage contracts, so both the lender and the borrower can know what to expect. Sometimes, lower rates are given by the lender for an initial period. This can help convince the borrower to take out the mortgage. Then, however, the interest rate can be changed on the adjustment date. So, for example, a mortgage could offer a three percent interest rate for the first five years, after which point, it jumps to five percent. The adjustment date would be the date that the change in interest rate happens, in this circumstance.

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