drop lock

British  

noun

1. finance a variable-rate bank loan used on international markets that is automatically replaced by a fixed-rate long-term bond if the long-term interest rates fall to a specified level; it thus combines the advantages of a bank loan with those of a bond

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Example Sentences

This week also saw Barclays' Woolwich mortgage arm launch the "drop lock", a facility for all new tracker and offset mortgage customers that will allow them to switch to a fixed rate product in the future without incurring an early repayment charge.

From The Guardian

"The 'drop lock' provides customers with peace of mind that they can go into a low tracker rate now and switch at a point in the future when they need greater security," says Andy Gray at Barclays.

From The Guardian