Variable Rate

Variable rate is a general term for any interest rate or dividend that changes on a periodic basis, rather than remaining fixed. In the specific context of loans, mortgages and deposits, this is more fully described as a variable interest rate, which moves in line with a market benchmark plus a lender's margin.

The broader "variable rate" phrasing is also sometimes used outside lending, for instance to describe a dividend payout that is not fixed in advance. For the full explanation of how a variable interest rate works on loans and deposits, the benchmarks it typically tracks, and how borrowers manage the resulting uncertainty, see the main Variable Interest Rate entry.