The intro period, also called the introductory period or initial rate period, is the time from the day an account is opened, when a promotional interest rate or other favorable term applies, until the promotion expires.
The intro period, also called the introductory period or initial rate period, is the time from the day an account is opened, when a promotional interest rate or other favorable term applies, until the promotion expires.
For example, a balance transfer credit card might offer a zero percent interest rate for the first six months. That six months is the intro period. When it expires, the card’s interest rate will increase. An adjustable rate mortgage might offer a promotional interest rate for a year, and when that ends, the rate may reset.
The initial interest rate for an adjustable rate mortgage (ARM) might be in effect for one month to ten years, depending on the loan type. For example, a 1-year ARM’s initial interest rate is in effect for one year. A 5/1 ARM’s initial rate is fixed for five years, and so on.
In general, the shorter the introductory period, the lower the initial rate, and the longer the introductory period, the higher the initial rate. When 3/1 ARM rates are 2.5 percent, for example, 5/1 ARM rates might be 2.875 percent and 7/1 rates might be 3.0 percent.