Half life

For the scientists among you, then the idea of a half life will be familiar, and whilst referring to something different in the world of finance, the principle is the same.

The half life refers to the time that it takes to repay half a loan, and usually refers to a mortgage product. Thus if you owe £100000 then the half life would be the time that it takes to pay back £50000 of that loan amount. Interest rates affect things because if interest rates go up then the half life also goes up, and vice versa.

Related Articles

Merchant Banking
What is LIBID
Going long

More Financial Words and Vocabulary Explained