If a bank offers a slightly lower rate in the initial years and higher rate in later years, it is called a teaser loan. For this type of loan an introductory rateis offered. It is an interest rate charged to a customer during the initial stages of a loan. This rate, which can be as low as 0%, is not permanent. It has an expiration after a specified period of time. Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.