DEFINITION of 'Mortgage-Backed Note'
A type of promissory note that is associated with a particular mortgage loan. Mortgage-backed notes represent the legal promise to repay a mortgage loan. These notes specify the terms of the loan, including the amount of interest and principal that must be repaid. They also obligate the borrower to make the payments.
BREAKING DOWN 'Mortgage-Backed Note'
The terms of mortgage-backed notes determine the type of mortgage that they back. If a note has a fixed schedule of principal and interest payments, then the mortgage is a fixed-rate mortgage. If the note has a flexible interest rate, then the mortgage is an adjustable-rate mortgage.