FORWARD INTEREST RATE AGREEMENT Definition

Bookmark and Share

FORWARD INTEREST RATE AGREEMENT is where two entities agree to a fixed interest rate in the future. If the actual rate is different than the fixed rate, one party will pay the other party the present value of the difference between the interest cash flows. Essentially the two entities are gambling on which way the interest rate of an index will change. These contracts are not traded on an established exchange but rather are private contracts between parties.

Learn new Accounting Terms

SERVICE LEVEL AGREEMENT (SLA) is performance objectives reached by consensus between the user and the provider of a service, or between an outsourcer and an organization. A service level agreement specifies a variety of performance standards that may or may not include "service level."

REFINANCE is to to renew or reorganize the financing of an asset, e.g. obtaining a new mortgage loan on a property already owned. Often to replace existing loans on the property.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.