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Times interest earned ratio |
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Times interest earned ratioEarnings before interest and tax, divided by interest payments.Times interest earned ratio Similar MatchesIncidence of interest calculationIncidence of interest calculationThe frequency that the outstanding interest and ongoing mortgage repayments are calculated. Charging interest on the outstanding balance of your loan at the end of each day, means you reap immediate benefits of any repayments you make, since you will be charged interest on a smaller debt each day. As long as you are making payments on time, the more often interest is calculated the better for you. This is a common feature of flexible mortgages, but is not restricted solely to them. When interest is calculated annually, repayments are not updated to include the reduction in capital that arises from the payments you make throughout the year. Add on InterestAdd on InterestA method of charging interest usually used in the financing of automobiles, but not generally used in real estate financing. Interest is computed on the total amount borrowed and added on to the principal. Each payment is then deducted from this total amount. Interest on real estate loans is usually figured based on the balance owing after each payment is made (declining balance). Interest rate floorInterest rate floorAn interest rate agreement in which payments are made when the reference rate falls below the strike rate. Related: Interest rate cap. Compound interestCompound interestInterest paid on previously earned interest as well as on the principal. Interest rate swapInterest rate swapAn arrangement in which two parties agree to exchange periodic interest payments, at agreed intervals, over an agreed period, but without any principal being paid. The most common and simplest deal involves one party paying a fixed rate of interest and the other paying a floating rate. IRSs are used for hedging, speculation or arbitrage. Further SuggestionsInterestOrdinary interest Earnings before interest, taxes, depreciation, and amortization (EBITDA) interest cover Earnings before interest and, taxes (EBIT) Deferred interest mortgage Best interests of creditors test Mortgage interest deduction Interest only mortgages Interest only loan Interest equalization tax Interest rate ceiling Daily interest Unearned interest Amortizing interest rate swap Earnings before interest after taxes (EBIAT) Spot interest rate Variable Interest Rate Cash flow after interest and taxes Nominal interest rate Interest rate parity line (IRP) Covered Interest Rate Parity Interest sensitive stock Effective annual interest rate Interest rate parity line (IRP) |
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