What are floating interest rates
A floating interest rate is an interest rate that moves up and down with the rest of the market or along with an index. It can also be referred to as a variable interest rate because it can vary over the duration of the debt obligation. A floating interest rate refers to a variable interest rate that changes over the duration of the debt obligation. It is the opposite alternative to a fixed interest rate loan, where the interest rate remains constant throughout the life of the debt.