INITIAL INTEREST RATE
The interest rate that is fixed for some specified number of months at the beginning of the life of a an ARM. The initial rate is sometimes referred to as a “teaser rate”.

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INTEREST ONLY MORTGAGE
A mortgage on which for some period the monthly mortgage payment consists of interest only. During that period, the loan balance remains unchanged.

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INTEREST RATE
The rate charged the borrower each period for the loan of money, by custom quoted on an annual basis. A rate of 6%, for example, means a rate of 1/2% per month. A mortgage interest rate is a rate on a loan secured by a specific property.