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Fixed-rate borrowing

A fixed-rate borrow position locks in both the interest rate and the term length when it is initiated. Both inputs are set once, at the moment of the match, so the cost of capital is known for the full term. Every position has an explicit end date called its maturity. The term is agreed upfront and defines exactly when repayment is due.

On Tenor​

When you initiate a fixed-rate borrow position on Tenor, you place either a market order or a limit order:

  • Market order: borrow right away at the best rate currently available.
  • Limit order: set the rate you want and wait for a counterparty to match it.

See order types for how each one works and what happens to your collateral while a limit order waits.

Every match is peer-to-peer. You post collateral and a lender supplies the loan token at the agreed rate and term, and the position is initiated and settled onchain through Morpho Midnight (fixed-rate, fixed-term markets) smart contracts.

Each market sets its terms in advance: the loan token, the accepted collateral tokens (each with its own oracle and LLTV), and the maturity are fixed and shared by everyone in the market. Only the rate and the filled amount vary from one match to the next.

Example​

Consider a USDC market collateralized by cbBTC, priced by a Chainlink BTC/USD oracle, with an 86% LLTV and a maturity 30 days out. With cbBTC at $80,000, a borrower deposits 1 cbBTC as collateral and borrows 50,000 USDC at a 5% fixed rate until that maturity. From the moment the position is matched:

  • The borrowed 50,000 USDC accrues interest at 5% for the full 30 days. The rate is set until maturity.
  • At maturity, the borrower owes 50,205.48 USDC:
50,000×(1+30365×5%)≈50,205.48 USDC50{,}000 \times \left(1 + \tfrac{30}{365} \times 5\%\right) \approx 50{,}205.48 \text{ USDC}
  • The starting LTV is 50,00080,000=62.5%\tfrac{50{,}000}{80{,}000} = 62.5\%, well below the 86% LLTV. The position is liquidatable before maturity only if cbBTC falls far enough that LTV crosses the LLTV.

At maturity​

You can repay and close the position at any time before maturity. At maturity, the outstanding debt is due. You can settle it manually, or opt in to Tenor's auto-renewal smart contracts to roll into a new term automatically.

A position that is neither repaid nor renewed by maturity becomes eligible for liquidation, regardless of LTV. Before maturity, the position can also be liquidated if its LTV crosses the market's LLTV. See liquidations for the full mechanics of both paths.