- Percentage a borrower pays for the use of money, usually expressed as an annual percentage, as specified on a promissory document.
percentage, promised rate, interest rate
Related Terms and Acronyms
- Annual Mortgage Statement — Definition, Important,
- A report sent to the borrower every year, detailing how much principal remains on the home loan and how much was paid in taxes and interest during the previous year.
- Annual Percentage Rate (APR) — Acronym, Very Important,
➥ A number used to compare costs associated with mortgage loans and other forms of financing.
- A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor.
- Note — Definition,
- A legal acknowledgement of a debt and an implicit promise to repay. It includes the loan amount, interest rate and term.
- Rate — Definition,
- Percentage a borrower pays for the use of money, usually expressed as an annual percentage.