term-rate

Vocabulary Word

Definition

In business language, 'term rate' describes the amount, or 'rate,' a person will get or pay in exchange for a service or product provided over a period of time. Like a monthly phone plan you pay $45 for.

Examples in Different Contexts

In mortgage financing, 'term rate' is the interest rate on a mortgage for a specific term before needing renewal. A mortgage broker might explain, 'The term rate for a 2-year fixed mortgage is currently 2.7%, providing stability in your monthly payments for the duration.'

Practice Scenarios

Business

Scenario:

With the bank's current proposal, we'd be looking at a significant sum over the next five years. Should we continue discussions?

Response:

It seems better if we negotiate the term rate longer to lessen the yearly financial strain.

Accounting

Scenario:

We have an opportunity to upgrade our office equipment, but it comes with additional costs. Are we in a position to add this to our annual budget?

Response:

If the term rate for the office upgrade is manageable, I believe it's a worth-considering investment.