For which loan types does an APR increase of more than ⅛% generally apply?

An increase in the Annual Percentage Rate (APR) by more than ⅛% typically applies to both fixed-rate and adjustable-rate loans because it reflects changes in the costs associated with borrowing over time. In fixed-rate loans, the APR encompasses the total cost of the loan, including interest and additional fees, which can be adjusted based on changes in economic conditions or lending regulations.

For adjustable-rate loans, the APR can also see increases more frequent than in fixed-rate loans, particularly when the market interest rates rise. This is because the rates for adjustable loans are tied to specific indices that can fluctuate, influencing the overall cost of borrowing.

While home equity loans and other loan types may have specific pricing structures, the broader statement includes both fixed-rate and adjustable loans due to the commonality in how APR is calculated and adjusted based on market conditions and lender pricing strategies. Thus, recognizing the APR changes in both types of loans helps borrowers understand their costs accurately and make informed financial decisions.