Definition: A subprime mortgage is granted to borrowers whose credit history is not sufficient to get a conventional mortgage. Often these borrowers have impaired or even no credit history. These can also include interest-only loans.
For more background information about how subprime mortgages have caused the current stock market decline, see A Primer on the Subprime Mortgage Crisis.
Alternate Spellings: sub-prime
Examples: Homeowners with subprime mortgages are most likely to default when the housing market declines.
