Initial Interest Rate
Is a company: no
Is a proper noun: no
- starting interest rate
Definition of Initial Interest Rate
- 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,
➥ You can compare mortgage rates using this website by clicking 'Rates' above.
- The interest rate on a mortgage loan.
- 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 variable rate mortgage product.
- 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.
- Variable Rate Mortgage (VRM) — Acronym, Very Important,
➥ A type of mortgage loan offered by brokers and lenders.
- Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
- 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.