Renegotiated-Rate Mortgage [RRM] Law and Legal Definition

Renegotiated rate mortgage is a type of balloon mortgage in which the interest rate is revised at preset intervals but is not pegged to an index. The interest remains fixed for a certain period of time, usually 3 to 5 years. The parties may renegotiate the interest rate and, if they come to an agreement, the lender will change the rate with a minimum of fees and expenses. If no agreement is reached, the borrower is free to move the loan. Renegotiated-rate mortgage is also known as rollover mortgage.