Index (Also Called "Rate Index")
A regularly scheduled published rate, independent of the lending institution, that measures the prevailing cost of funds, and is used periodically with the margin to set AML accrual rates. Common indices are the 1-Treasury Security and FHLBB's Cost of Funds.

Initial Borrower Interest Rate (IBIR)
The rate on which the borrower's initial cash payment is calculated. If the loan is discounted or bought down, it may be lower than the Fully Indexed Accrual Rate.

Initial Borrower Payment Rate (IBPR)
The annual interest rate used to calculate the borrower's initial cash payment. If, for example, the note specifies that a fully amortizing annual rate of 11% be used to calculate the initial monthly payment, and that rate is "bought down" 2%, the IBR is 9%.

Interest
The fee for borrowing money.

Interest Rate Cap
A provision of an ARM limiting how much interest rates may increase per adjustment period. See also Rate Caps and Lifetime Cap.