deferred interest

Definition

Unpaid interest on an Adjustable Rate Mortgage that is added to the principal of the loan if loan payments due not cover the interest owed.

Use deferred interest in a sentence

You should try and make sure you know how much the deferred interest will be so that you know how much you owe.

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Joe's deferred interest kept increasing because after he lost his job, he could no longer afford to cover the interest and principal payment on his home loan.

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When the economy fell on tough times in 2008, I made the bad choice to accrue deferred interest on my adjustable rate mortgage, and I now owe significantly more than the original value of the loan.

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