step rate mortgage

Definition

A loan which allows for a gradual interest rate increase during the first few years of the loan.

Use step rate mortgage in a sentence

You may want to try and take on a step rate mortgage so that you can get the best value for your money.

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The interest on our loan went from 1.5% to 3.5% in 5 years because we were able to take out a step rate mortgage.

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The step rate mortgage was an acceptable mortgage as we were only requiring a low interest rate during the first year.

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