two-step mortgage

two-step mortgage definition - business

two-step mortgage

A special type of adjustable-rate mortgage that offers a reduced rate of interest for a specified number of years (generally five to seven) after which the interest rate adjusts to a fixed market rate for the remainder of the term. Unlike most adjustable-rate mortgages, the interest rate on a two-step mortgage is adjusted only one time. Also called hybrid mortgage.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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