Variable interest rate

A variable interest rate is a lending rate that changes over the loan term based on external market indicators, typically EURIBOR, prime rates, or bond yields. Unlike fixed rates, the borrower's payment obligations fluctuate with these benchmark movements.

For commercial property owners and investors, variable rates offer potential savings when markets weaken, but exposure to rising costs when interest environments turn unfavourable. Periodic review dates—usually annual or biennial—reset the rate according to current market conditions.