Terms & Definitions - I

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.

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.

Interest Only Loan
A term loan arrangement calling for payments of interest only, not to include any amount for principal.

Interest Rate
The percentage of an amount of money that's paid for its use over a specified time period.

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.

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.