flexible-rate mortgage: meaning, definition, pronunciation and examples

Not exactly. A tracker mortgage is a type of flexible-rate mortgage where the rate is explicitly set at a fixed margin above a specific benchmark (like the Bank Rate). Other flexible-rate mortgages may use different or internal benchmarks.

Borrowers who expect interest rates to fall, who have a high risk tolerance, or who plan to sell or refinance before the initial fixed period ends.

Key terms include the adjustment frequency, interest rate cap (maximum increase per period and over the loan's life), the index it tracks, and the margin above that index.

Prevalence varies by country and interest rate environment. They are more common in the UK and Canada than in the US, where long-term fixed rates dominate. Their popularity increases when fixed rates are perceived as high.

A home loan where the interest rate can change periodically, typically based on a benchmark interest rate.

Flexible-rate mortgage is usually formal, financial, technical in register.

Flexible-rate mortgage: in British English it is pronounced /ˌflɛksɪbl̩ ˈreɪt ˈmɔːɡɪdʒ/, and in American English it is pronounced /ˈflɛksəbəl ˌreɪt ˈmɔːrɡɪdʒ/. Tap the audio buttons above to hear it.