A variable rate interest is a type of interest rate that can change over time, usually in relation to an underlying benchmark rate, such as the prime rate or LIBOR. This means that the amount of interest you pay on a loan or earn on an investment can fluctuate, which can affect your overall financial costs or returns. Variable rate interest is commonly found in various financial products, including mortgages, credit cards, and personal loans. While it can lead to lower initial payments, it also carries the risk of increasing costs if interest rates rise, making it important for borrowers to understand the potential for changes in their payment amounts.