Mortgage glossary
Updated October 8, 2026
The words our pages use, in plain English. Where a word names a number, today's figure is in the card below.
Rates and prices
- 10-year Treasury yield
- What the U.S. government pays to borrow for ten years, published by the Treasury every business day. Mortgage rates tend to move with it, so our estimate follows its daily move between APOR's weekly updates.
- APOR (average prime offer rate)
- A weekly APR for a borrower with strong credit, by product and term, published by the Federal Financial Institutions Examination Council (FFIEC) from a survey of lenders' offers. It is public, and it is the anchor of our estimate. Each week's rates apply from its Monday.
- APR (annual percentage rate)
- The rate with the lender's charges, such as points and fees, spread over the loan, as federal rules define it. An ad that states a rate must show the APR beside it, as prominently. It is the fairer way to compare two offers.
- Basis point (bp)
- One hundredth of a percentage point.
- Discount points
- An upfront fee paid to lower the rate. One point is one percent of the loan amount. We say percentage points for a change in a rate, so the two never mix.
- Estimate
- A number we work out from public data, never an offer from a lender. Only a lender's Loan Estimate is an offer.
- Fully indexed rate
- An adjustable loan's rate once it resets: its index plus the lender's margin. Its APR assumes the reset, which is why it sits further above the starting rate than a fixed loan's.
- LLPA (loan-level price adjustment)
- Fannie Mae's grid of extra charges by credit score and loan-to-value. Turned into rate, it is why a lower score or a smaller down payment costs more.
- National estimate
- An estimate with no local adjustment, the same in every state. Our estimates are national for now; loan limits are local.
- Note rate (interest rate)
- The rate your loan's payments are worked out from. A lender quotes it beside the APR.
- Pass-through
- How much of a move in the 10-year Treasury yield a product's APOR follows, measured on years of weekly history. One would mean it follows fully; zero, not at all.
- Percentage point
- The difference between two percentages, such as two rates. We write it in full, never as points, so it is not confused with discount points.
- R squared (R²)
- How much of APOR's weekly moves the Treasury yield explains, from zero (none) to one (all). The lower it is, the less certain our estimate.
- Rate lock
- A lender's promise to hold a rate for a set number of days while your loan is made. If rates rise meanwhile, your rate stays. If the lock runs out before closing, the lender may price the loan again.
- Reference borrower
- The borrower APOR is priced for, with excellent credit and a large down payment. Every other borrower's estimate starts from this one and adds the difference in their Fannie Mae charges, which can be below zero.
- Typical points
- The points the loans behind APOR paid on average. Our estimate is the rate at those points, not a rate with no points, because APOR is priced that way.
The loan
- ARM (adjustable-rate mortgage)
- A loan whose rate is fixed for a first period, then resets on a schedule. A 5/6 ARM is fixed for five years, then resets every six months.
- Balance
- What is still owed on the loan.
- Conforming loan limit
- The largest loan Fannie Mae and Freddie Mac buy, set each year for every county by the Federal Housing Finance Agency (FHFA). Most counties share one standard limit; costlier ones have higher limits.
- Credit score band
- The range your credit score falls in. Our estimates and Fannie Mae's charges are set by ranges of credit score and of loan-to-value, not by exact numbers.
- FHA loan
- A loan insured by the Federal Housing Administration, often with a smaller down payment. The Department of Housing and Urban Development (HUD) sets its limit for every county, from a national floor to a ceiling.
- HELOC (home equity line of credit)
- A line of credit secured by your home, usually beside your first loan, that you draw on as you need it.
- High-cost area
- A county whose loan limit is above the standard one, because homes there cost more.
- Jumbo loan
- A loan above the conforming limit. Lenders price it themselves, so its rate can differ from a conforming loan's. Our estimates do not cover it yet.
- LTV (loan-to-value)
- The loan over the home's value. A bigger down payment, or more equity, means a lower LTV.
- Term
- The loan's length. The years left are its remaining term.
- VA loan
- A loan guaranteed by the Department of Veterans Affairs, for service members, veterans and some surviving spouses.
Refinancing
- Break-even
- The month when what you save has repaid the closing costs. We count the interest you save, not the drop in payment, so a longer new term does not flatter it.
- Cash-out refinance
- A new first loan larger than the old one, with the difference paid to you.
- Closing costs
- What a new loan costs upfront: the lender's fees, points, title and appraisal. Our refinance check assumes a published fixed amount plus the points today's estimate is priced at, until you type your lender's figure.
- Lifetime interest
- The interest still to pay over a loan's life. Its change shows what refinancing saves or costs in all.
- Rate alert
- Your request to hear when today's estimate for you reaches a rate: your trigger rate, or one you choose. It is kept with your Google sign-in.
- Rate-and-term refinance
- A new loan that pays off the old one and its closing costs, with little or no cash to you. It is the refinance our check is about.
- Refinance
- Replacing your loan with a new one, usually for a lower rate or a different term.
- Same-term comparison
- A new loan over the years left on your current one, so a lower payment comes from the rate alone. A new loan of the full term also spreads the balance over more years.
- Trigger rate
- The rate at which refinancing your loan pays on average, counting the value of waiting for a lower rate later. Refinance when today's estimate is at or below it. We work it out with a model published by the economists Agarwal, Driscoll and Laibson.
Rules and data
- HMDA (Home Mortgage Disclosure Act)
- The law under which lenders report every mortgage application each year. Its public records are how local estimates will be made.
- Loan Estimate
- The form a lender must give you within three business days of your application, with the rate, the APR and the closing costs. It is an offer; our numbers are estimates.
- NMLS (Nationwide Multistate Licensing System)
- The registry of licensed mortgage companies and loan officers. A lender's ad shows its NMLS ID, which anyone can look up.
- Regulation Z
- The federal rules for consumer credit: among them, how an APR is worked out, and that an ad stating a rate shows the APR beside it.
How to cite this page
InfinityRateWatch. "Mortgage glossary." https://infinityratewatch.com/learn/glossary/. Data as of Oct 8, 2026.