Initial Interest Rate

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • starting interest rate

Definition of Initial Interest Rate

  1. The introductory interest rate on an adjustable-rate mortgage (ARM), which typically changes at a predetermined time.

Related Terms and Acronyms

  • Convertible ARM Definition,
    • An adjustable rate mortgage (ARM) that can be converted to a fixed-rate mortgage under certain conditions.
  • Teaser Rate Definition,
    • Often called the introductory rate, it is the below-market interest rate offered to entice customers to switch credit cards or lenders.
  • Prime Rate Definition,
    • The rate suggested by the Bank of Canada on which most banks base their prime mortgage lending rate.
  • Step-rate Mortgage Definition, Important,
    • A fixed-rate home loan on which payments are lower at the beginning, typically for two years, and which then rise.
  • Adjustment Period Definition,
    • The time between changes in the interest rate in an adjustable-rate mortgage.
  • Mortgage Rate Definition, Very Important,
    • The interest rate on a mortgage loan.
    You can compare mortgage rates using this website by clicking 'Rates' above.
  • Periodic Rate Cap Definition,
    • In an adjustable-rate mortgage (ARM), it limits how much an interest rate can increase or decrease from one adjustment period to the next.
  • Adjustable-Rate Mortgage (ARM) Acronym,
    • A type of mortgage loan program in which the interest rate and payments may be adjusted as frequently as every month. The principal loan balance or term of the loan may also be adjusted to reflect the rate change. The purpose of the program is to allow mortgage interest rates to fluctuate with market conditions.
    A type of variable rate mortgage product.
  • Variable Rate Mortgage (VRM) Acronym, Very Important,
    • Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
    A type of mortgage loan offered by brokers and lenders.
  • Posted Rate Definition,
    • The mortgage rates initially offered by a bank which a borrower is then expected to negotiate down.
  • Open Mortgage Definition, Important,
    • A mortgage that can be paid off prior to maturity without penalty.
  • Interest Rate (IR) Acronym, Very Important,
    • The rate a lender charges an individual to borrow money.
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