The timeframe in which a special intro rate may be in effect. After the intro period ends, the interest rate will usually increase.
Sometimes, in order for a lender or creditor to entice consumers to use their services, they spotlight interest rates that are lower than normal. What may not be apparent to potential borrowers is that this rate does not last for the entire life of the loan. If this is the case, that interest rate is good only for a set time frame called the intro period, and most likely, once the intro period is over, the rate will increase.
If you see an advertisement for a very competitive rate and you think it might be a good option for a mortgage or mortgage, you might want to read the fine print and give the lender a call. Before you make any decisions, you should see how long the interest rate lasts and at what rate it will be adjusted to after the intro period is over. You should then work out the numbers to see if the intro rate will indeed save you money, or if the interest rate after the intro period is over will cost you more money than it is worth.
July 20, 2006
