Glossary

Fixed-rate period

A fixed-rate period is the stretch during which your rate is locked and payments are certain, after which the loan often reverts to a variable follow-on rate.

2 min read

Locked rateCertain payments

Then revertsTo a variable rate

Definition

A fixed-rate period guarantees your interest rate for a set span — say two, three or five years — giving predictable payments regardless of what benchmarks do. When it ends, many facilities move to a reversion rate, usually a variable follow-on that can be higher.

In plain terms

It is a fixed-cost window. You trade the chance of falling rates for protection against rising ones, until the window closes.

Why it matters for your company

Diarise the end of any fixed period and review before you roll onto the reversion rate. See reversion rate and when fixing your rate makes sense.

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