abstract:An introductory rate (also known as a teaser rate) is an interest rate charged to a customer during the initial stages of a loan. The rate, which can be as low as 0%, is not permanent and after it expires a normal or higher than normal rate will apply.
On Thursday Bush unveiled his plan to freeze "teaser rates" on some adjustable-rate mortgages, to keep 1.2 million borrowers away from foreclosure if they aren't able to make their loan payments once the introductoryrate expires.
As you can imagine, the industry practice had always been to apply loan repayments to the lowest interest rate balances first, so they could pay down the 0% introductoryrate credit card offers, while cardholders amassed much higher interest on their new purchases.