As the name suggests, mortgage loans in which the interest rates adjust according to pre-set loaning conditions are known are adjustable-rate interests or floating rate or variable rate.
The changing rate is usually the sum of the market/bank rate and some additional percentage fixed by the financial institution.
Initially, the rate remains constant for the first few years and changes monthly or annually in the subsequent years depending on the outstanding balance. It proves beneficial only when the market rate continues to drop and the sum total is less than the actual rate. It can be classified further depending on the terms of interest payment.