HomeGlossaryAnnual Adjustment Rate

Annual Adjustment Rate

Explore commonly used personal finance terms.

The annual adjustment rate is the percentage by which the interest rate on an adjustable-rate loan can increase or decrease each year. This rate caps how much the loan’s interest rate can change annually, protecting borrowers from extreme rate fluctuations. The adjustment rate is crucial for borrowers with variable-rate loans, as it directly impacts monthly payments. Understanding the annual adjustment rate helps borrowers anticipate future payments and assess the financial impact of potential rate changes on loan affordability.

Other glossary terms

Adjusted Basis

Initial cost of an asset adjusted for certain factors

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Adjusted Book Value

Company’s book value after adjustments

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Adjusted Closing Price

Stock’s closing price after adjustments

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Adjusted Cost Base (ACB)

Original cost of an asset adjusted for improvements

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Adjusted EBITDA

EBITDA adjusted for specific expenses

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Adjusted Gross Income (AGI)

Total income minus specific deductions

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Adjusted Gross Margin

Gross margin after adjustments for specific expenses

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Adjusted Gross Margin Ratio

Profit margin after adjusting for irregular expenses

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Adjusted Gross Profit

Gross profit adjusted for specific factors

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Adjusted Net Asset Value (NAV)

NAV after accounting for adjustments

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Adjusted R-squared

Statistical measure of a model’s accuracy

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Adjusted Rate Mortgage (ARM)

Mortgage with variable interest rates

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Administrative Expenses

Overhead costs associated with running a business

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Administrative Fee

Charge for account maintenance or processing

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Advance Fee

Fee paid upfront before services are rendered

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Adverse Selection

High-risk individuals more likely to seek insurance

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Affidavit

Written statement used as legal evidence

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Affordability Index

Measure of housing affordability

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After-Tax Income

Earnings remaining after income taxes are deducted

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Aggregate Demand

Total demand for goods and services in an economy

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