Adjustment Frequency
How often the interest rate changes or resets on an adjustable-rate mortgage. Different adjustable-rate mortgages have different adjustment frequencies. Typically, the adjustment frequency is once a year, but it can be as often as once a month or as infrequent as once every five years.
Investopedia Commentary
The lower the rate-adjustment frequency, the lower the financial risk for the borrower. To compensate for lower interest rates in the future and thus lower margins, the lender will usually expect the borrower to pay a higher initial interest rate before the first reset date.
Related Links
Mortgages: Fixed-Rate Versus Adjustable-Rate
Understanding Your Mortgage
Understanding the Mortgage Payment Structure
Mortgages: How Much Can You Afford?
See also: Adjustable-Rate Mortgage - ARM, Adjustment Indexes, Fixed Interest Rate Mortgage, Interest Rate, Margin, Mortgage, Mortgage Broker, Negative Amortization Loan, Variable Interest Rate