The actual interest rate stated on your mortgage note, used to calculate your principal and interest payment.
The note rate is the actual interest rate stated on your mortgage note — the contract rate used to calculate your principal and interest payment. It differs from APR, which folds certain fees and costs into an annualized figure for comparison shopping, and from the effective rate during a temporary buydown, which reflects subsidized payments rather than a change to the loan itself.
Example
With a 6.5% note rate and a 2-1 buydown, your first-year payments act like 4.5%, but your loan — and what you must qualify at — remains 6.5%.
Also known as
contract rate, mortgage rate