Adjustable Rate Mortgage (ARM): A broad term for a loan (mortgage or deed of trust) with rates and terms that can change. The adjustable rate loan has become commonplace, with allowable ranges as to time intervals, percentage of increase or decrease and total increases or decreases likely to change as market conditions change.

 

Related Words

Adjustable Rate Mortgage (ARM): A loan with an interest rate that changes during the term of the loan. The payments generally increase or decrease with the interest rate. Rate is based on one of several 'index' options.

Teaser Rate: A teaser rate is a low introductory interest rate on a credit card or an adjustable rate mortgage (ARM). The lender must tell you how long the teaser rate lasts and what the real cost of bor . . . View Full Definition

Pass-Through Rate: The net interest rate passed through to investors after deducting servicing, management, and guarantee fees from the gross mortgage coupon.

Passive Portfolio Strategy: A strategy that involves minimal expectational input, and instead relies on diversification to match the performance of some market index. A passive strategy assumes that the marketplace wil . . . View Full Definition

Paris Interbank Offer Rate (PIBOR): The deposit rate on interbank transactions in the Eurocurrency market quoted in Paris.

Pass-Through Coupon Rate: The interest rate paid on a securitized pool of assets, which is less than the rate paid on the underlying loans by an amount equal to the servicing and guaranteeing fees.

Pass-Along Rate: The percentage of people who pass on a message or file.

Payment Rate: Generally, the amount paid per unit of production (i.e., bushel, pound, hundredweight) to each participating farmer for eligible production under commodity income and price support programs.

Participation Mortgage: A mortgage loan wherein the lender has a partial equity interest in the property or receives a portion of the income from the property.

Pension Mortgage: A personal mortgage is a type of personal pension plan which utilises the tax free lump sum entitlement from the pension fund at retirement age to repay a mortgage whilst the remainder is us . . . View Full Definition