Adjustment Interval

Definition - What does Adjustment Interval mean?

Adjustment interval represents the time between the changes in the interest rate of loans or mortgages. Most mortgages and loans have a fixed interest rate (for at least a year). These changes in interest rate are particularly seen in the case of variable-rate mortgages. There are some loans that change interest rate every month, while others have a fixed rate for five years.

Justipedia explains Adjustment Interval

Adjustment interval can be used to calculate the risk level of the borrower. The shorter the time period, the more risk is likely to be involved. For example, if the adjustment of a mortgage is one month, then the homeowner may have to face a higher interest every month. This may also increase the likelihood of a borrower going default.

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