Initial Rate

A mortgage or other loan's first-rate term contains an introductory interest rate (sometimes known as a teaser rate) that sunsets after the period. The first-rate time is only included in loans that provide an initial rate, as short as one month or as long as many years, depending on the loan type. Teaser loans are mortgages with short starting rate periods that provide meager introductory rates to lure new borrowers. Borrowers must be informed of the interest rates that apply once the first-rate period has expired.