Fixed-rate option
Fixed-rate option
A fixed-rate option is a feature included in some adjustable-rate home equity loans or lines of credit. The option allows the borrower to convert some or all of the outstanding debt to a fixed-rate loan. This option is only available under certain conditions, and these would be specified in the loan agreement. Debt having this option would be priced higher than the same debt facility that doesn't have the fixed-rate option.
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