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Glossary
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Index -
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one- three-, and five-year U.S. Treasury Security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average Costs-of-Funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down.
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Interest -
Consideration in the form of money paid for the use of money, usually expressed as an annual percentage. Also, a right, share, or title in property.
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Interest Only -
A term loan arrangement calling for payments of interest only, not to include any amount for principal.
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Interest Rate -
The percentage of an amount of money that's paid for its use over a specified time period.
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Interest Rate Swap -
A transaction between two parties, in which each agrees to exchange payments tied to different interest rates or indices for a specified period of time.
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Intermediate-Term Mortgage -
A mortgage loan with a stated maturity at the time of purchase that it is equal to or less than 20 years.
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