The initial rate is calculated by adding the Index Rate and Margin (if applicable) taking into consideration any interest rate rounding chosen.
The rate is subject to any floor or ceiling that has been entered. For example, an index rate of 3.25% plus a margin of 2.00% rounded to the nearest .125% with a floor of 6.00% will result in an initial interest rate of 6.000% due to the floor being higher than the market rate of 5.25%.
The initial rate is subject to any floor or ceiling that has been entered when the options have been selected indicating the rate is subject to either the floor or ceiling or both. For example, an index rate of 3.25% plus a margin of 2.00% rounded to the nearest .125% with a floor of 6.00% will result in an initial interest rate of 6.000% due to the floor being higher than the market rate of 5.25%.