What is reinvestment risk?
The lender’s risk that principal returned through amortization or prepayment must be re-lent at whatever rates prevail, often lower, just when the old fixed rate was most valuable.
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.