Interest Rate Options Flashcards
1
Q
Capped
A
Guaranteed rates fixed.
2
Q
Cap and collar
A
Guaranteed rate between higher (cap) and lower (collar) amount.
3
Q
Discount
A
Rate reduced by set % below standard rate charged by lender.
4
Q
Euro
A
Interest and capital in euro’s to take advantage of rates.
5
Q
Equity
A
Linked or shared appreciation- lender takes stake
6
Q
Equity release
A
Release money
7
Q
Fixed interest
A
Interest rate fixed.
May carry redemption penalties
8
Q
Flexible reserve
A
Payments varied and lump sum repayments can be made.
Borrower can use this are withdraw.
9
Q
Foreign currency
A
Increase and decrease in line with pound
10
Q
Offset
A
Mortgage and bank linked interest charge combined.
