That which points out; that which shows, indicates, manifests, or discloses; as, the increasing unemployment rate is an index of how much the economy has slowed.
An objective factor used to determine interest rate adjustments on an adjustable-rate mortgage.
A term used with ARM loans. The index is the measure of interest rate changes that the lender uses to decide how much the interest rate on the ARM will change over time. No one can be sure when an index rate will go up or down. Some common indexes used are: 1 year Treasury rate, COFI (Cost of Index Funds) & 6 month LIBOR (London Interbank Offered Rate).
A published measure of economic conditions usually relative to other financial instruments such as Treasury notes or Treasury bills. The lender uses a particular index to calculate the interest rate on an adjustable rate mortgage (ARM) by adding a fixed margin to the index. The most common indexes are: Constant Maturity Treasury (CMT) Treasury Bill (T-Bill) 12-Month Treasury Average (MTA) 11th District Cost of Funds Index (COFI) London Inter Bank Offering Rates (LIBOR) Certificates of Deposit (CD) Indexes Prime Rate
An economic indicator that is used to determine changes in the interest rate of an Adjustable Rate Mortgage. U.S. Treasury bills and notes are the most common but there are others. The rate is periodically adjusted to the index value plus a margin.
A measure of interest rate changes used to cover such items as taxes and hazard insurance premiums.
Published rate that serves as a base for the interest rate charged on a mortgage, home equity line, or other loan; this also can be the base for rate changes used by the lender.
A measure of fluctuations in certain factors of economic activity and serves as an indicator for past and current market trends. Indexes are usually expressed as a number or a percentage and correlates to a level of activity at a given point in time. Interest rates on ARM loans increase or decrease according to the index designated at the time of closing. An interest rate of an ARM loan is derived from the current index rate plus a margin set at the time of the loan closing. There are many different indexes that are used such as: Prime, COFI (Cost of Funds Index), T Bill (Treasury Bill), and Libor (London Interbank Offered Rate).
When talking about adjusting rate mortgages, the index is usually expressed as a composite of interest rates. Often, these rates are the rates of the U.S. Treasury Securities. Changes in the index determine how the interest rates will change on an adjustable rate mortgage (ARM).
An MCA function that jumps the cursor from one region of interest to another.
the economic indicator that the adjustable loan is tied to.
A published interest rate which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments which is used to adjust interest rates on an adjustable mortgage. The interest rates can be adjusted up or down.
Is a financial indicator used for adjustable rate mortgages.
A measure by which Adjustable Rate Mortgage interest rates are raised and lowered. By law the index must be published and is able to be verified by the borrower and not controlled by any one financial institution.
lenders look at a number of economic and financial determinants to arrive at the lending index. Interest rates to borrowers are determined by taking the index rate and adding a lender's margin.
A rate to which the interest rate on an Adjustable Rate Mortgage is tied. The interest rate may go up or down depending on whether the index rate goes up or down.
A number calculated by weighting a number of prices or rates according to a set of predetermined rules. The mortgage market is most concerned with the values of the 30-Year Treasury Bond, 1, 5, and 10-Year Treasuries, Cost of Funds Index and LIBOR rates (1,3 and 6-month).
A regularly published rate, that is used with the margin to establish interest rates charged on Adjustable Rate Mortgages.
An interest rate indicator used to determine changes in the mortgage interest rate for an ARM loan. Commonly used indices include; 6-Month, 1, 3, or 5-Year Treasury Bills
A regular published rate that is used periodically with the margin to determine the interest rate adjustment for an Adjustable Rate Mortgage.
The rate you pay directly related to a particular interest-rate index.
The index is a published interest rate that's tied to an ARM's interest rate.
A published interest rate, e.g. Bank of England base rate which is used to determine the rate on a variable rate mortgage.
A published interest rate used to determine the interest rate payable on an adjustable-rate mortgage or class.
A measurement used by lenders that determines the changes in monthly payments for adjustable rate loans.
Determination of interest rate variability used to determine the changes in an ARM loan interest rate over the term of the loan.
economic indicator, generally a published interest rate that is used to determine changes in the interest rate on an ARM. ARM rates are adjusted at fixed periods to reflect changes in the index. An amount is added to the index to establish the actual interest rate on an ARM. This added amount is called a MARGIN.
The market interest rate to which an adjustable rate loan is pegged, e.g., a 10-year Treasury bill rate.
The interest rate on an ARM (adjustable rate mortgage) is tied to a specific, published index rate. At the end of each period, the lender is authorized to adjust the mortgage note rate depending on the movement of the index since the last time of adjustment. Most lenders use indexes based on the U.S. Treasury Securities. Others use cost-of-funds indexes.
The base rate for changes that a financial institution uses to determine how the APR or yield will change over a period of time. The prime rate is typically used for home equity lines of credit.
an indicator used to measure inflation, which is a basis for the ARM loan. There are various sources of indexes, including treasury securities, treasury bills, 11th district cost of funds and the index of the Federal Home Loan Bank Board.
A published measure of the cost of money that lenders use to calculate the home equity line of credit rate. We use the Prime rate.
A published interest rate that can be utilized by lenders to determine rate adjustments associated with an ARM.
ARM interest rates vary in accordance with an index prescribed by the lender.
An average banking/treasuries computation used to make adjustments in adjustable rate loans. Common indices are average CD rate, cost of living, etc.
The interest rate for an adjustable rate mortgage is tied to a published rate called an "index". The index is the base for the "cost" of the money that is loaned to the borrower. by law, the index to which an adjustable rate mortgage is tied must be published regularly and cannot be under the control of any one financial institution. In addition, the borrower must be able to independently verify the index. The most commonly used indices used for an adjustable rate mortgage are the LIBOR, U.S Treasury and COFI.. Interested Parties Person or entity who benefits from the completion of the property sales transaction and may be the property seller, builder, devloper, real estate agent or lender.
A reference oint used to determine if rates on ARMs can change. Commonly used indices are the 11th District Cost of Funds and the One Year Treasury Index.
The 3-month U.S. dollar LIBOR as published in the “Money Rates” section of The Wall Street Journal five business days before the end of the preceding quarter.
Adjustable rate mortgages adjust based on the index rate. U.S. Treasure Securities and the LIBOR Index (London Interbank Offered Rate) are the most common index's used for adjustable rate mortgages. Typically an ARM will adjust based on a fixed margin plus the index rate.
A published financial benchmark used to help determine the interest rate for an adjustable rate mortgage on its adjustment. The margin is added to it.
A fluctuating economic indicator specified in the mortgage note, the value of which is used to adjust the note rate of the mortgages in an ARM PC pool.
Base for interest rate changes on adjustable-rate loans.
A published interest rate which lenders use to base interest-rate changes on an adjustable-rate loan. Common indices are LIBOR and T-Bill
Generally a published number or percentage, such as the yield on the One-Year Treasury Bill, which is used to compute the interest rate for an adjustable rate mortgage.
The economic indicator, by which future interest rates for Adjustable Rate Mortgages are based. Common indexes include the "Cost of Funds" for the Eleventh Federal District of banks or the average interest rate of a 1 year Government Treasury Security.
A financial instrument that provides the basis for the interest rate charged on a loan. Federal Stafford loans are typically indexed to the current rate of the 91-day U.S. Treasury bill. Alternative student loans are typically indexed to other widely accepted financial instruments, such as the current LIBOR rate, the current T-bill rate, or the current Prime rate.
An interest rate indicator used to determine changes in the mortgage interest rate. The maturity of the index chosen usually corresponds to the loan's adjustment interval. Some commonly used indexes include: 6-month, 1-year, 3-year, and 5-year Treasury Bill rates.
What lenders tie their interest rate changes to. The Credit Union uses indices to set the mortgage rates weekly. The FHLMC (Federal Home Loan Mortgage Corporation Rate -- “Freddie Mac”) is the index used for primary mortgages, construction, land and investment loans. The prime is what is used for the Home Equity Line of Credit.
The interest rate on a ARM is tied to an index rate. At the end of a mortgage's adjustment period, the lender is authorized to adjust the mortgage note rate depending on the movement of the index since the borrower's last adjustment. Most lenders use indexes based on U.S. Treasury securities, while others use cost-of-funds indexes.
A nationally recognized interest indicator that is used by lenders to establish rates for adjustable-rate loans (ARM).
A standardized guide for the rate of return of selected interest bearing investments as of a given date. For mortgage lending, the index used must be publicly available (for example, an index based on the U.S. Treasury bill rate). The index is used in the calculation of rate changes for adjustable rate mortgages and determines how much the annual percentage rate will change over time. There are no terms beginning with J. There are no terms beginning with K.
A general index to which the interest rate on an ARM is tied. Some commonly used indices include the 1 Year Treasury Bill and the 6 Month LIBOR or COFI.
A rate or market cost of funds used by lenders as a barometer to determine when and if adjustments on variable / adjustable rate loans should be made. A common index (though not used on first lien mortgages typically) is the Prime Rate. Other common indexes include the Cost of Funds for the Eleventh Federal District of banks or the average rate of a one year Government Treasury Security. Lenders will add a margin (see margin) to this index value as agreed to by contract to determine the rate on an adjustable loan.
The indicator of current economic conditions used to determine changes in adjustable loan interest rate.
A benchmark, usually a published interest rate, such as the one-year London Interbank Offered Rate (LIBOR) security yields, used to calculate the interest rate of an adjustable rate mortgage when rate is scheduled to change. Generally, a margin stated in loan documents is added to the index to determine the new interest rate.
A figure used by lenders to set the rate on adjustable-rate mortgages. In calculating mortgage rates, a lender must use an index over which it has no influence. The Treasury Security Index is one example.
A base for determining the interest rate adjustment. Indexes generally reflect prevailing market conditions.
A statistic that indicates current economic or financial conditions. Adjustable-rate mortgages are based on the movement of a specific independent index.
Measure of the overall level of market interest rates that the lender uses as a reference to calculate the interest rate on an ARM. The index plus the margin determines the rate on an ARM. One example used on some mortgages is the 6 month treasury bill. If the going rate for these bills is 5.0% and the margin is 2%, your interest rate would be 7%.
Any financial table used to set the interest rate on adjustable rate mortgages
A published rate or benchmark measure of current interest rate levels used to calculate periodic changes in rates charged on adjustable rate mortgages.
The index is the measure of interest rate changes that the lender uses to decide how much the interest rate on an ARM will change over time. (i.e. 1-Year Treasury Bill, 3-Year Treasury Bill, LIBOR, etc.)
1. A statistic that indicates some current economic or financial condition. Indexes are often used to make adjustments in wage rates, rental rates, loan interest rates, and pension benefits set by long term contracts. EXAMPLE: Office building rental rates are sometimes adjusted in relation to the consumer price index. 2. To adjust contract terms according to an index. EXAMPLE: Mortgage interest rates on adjustable rate mortgages are often indexed to the average mortgage rate for all lenders or the average cost of funds for all lenders.
A measure of interest rate changes used to adjust the interest rate of an Adjustable Mrtgage Loan.
A standard, publicly reported interest rate on which loan interest rates are based, such as the prime rate or T bill rate. Loan rates are often stated base on the index plus a margin. For example: Prime + 1%.
An announced rate used by lenders that serves as the basis for determining interest rate changes on ARM loans. Typical indices are the 1 year treasury security (1 yr T-Bill), London Interbank Offered Rate (LIBOR), Prime Rate, 11th District Cost of Funds (COFI), and the CD index. All of these rates are published rates.
A statistical indicator of a price level expressed as a rate. Examples include Prime, T-Bill, MTA, 11 Dist. COF, LIBOR, etc. The index is the base rate used by the lender to calculate the interest rate you pay on your loan.
A published market-based figure used by lenders to establish a lending rate. The most common indices are: the one-year Treasury Constant Maturity Yield; the Federal Home Loan Bank (FHLB) 11th District Cost of Funds; prime rate as listed in the Wall Street Journal.
The basis that lenders use to adjust the interest rate on ARMs. ARMs are quoted on a first-year rate, and expressed as an index plus a margin. A 5/1 ARM may be advertised at 6% with a 2.5% margin over the U.S. 30-year bond index. 5/1 ARM 2.5% Margin 30 Year Rate Bond Index Plus Margin Interest Rate 1st Year 2nd through 4th Years 2.5 8.5 Fifth Year 7.5% 2.5 10% The first year's rate would be 6%. The second year, the rate would be 2.5% over the 30-year bond rate, say 7%, making the rate through year five 9.5%. In the fifth year, the rate is adjusted again, 2.5% over the current 30-year bond rate, now 7.5%, making the new rate 10%.
published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments, which is then used to adjust the interest rate up or down on an adjustable mortgage. (Investments could include one or more of the following: one, three, and five-year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, the monthly average costs-of-funds incurred by savings and loans.)
an economic indicator, usually a published interest rate.
A published rate used by lenders to calculate interest adjustments on adjustable rate mortgages (Index + Margin = Interest Rate). Common indexes include 1-Year Treasury securities, COFI (Cost Of Funds Index) and Six-Month LIBOR (London Interbank Offered Rate).
An index is used to determine future variations in payment and or rate for adjustable Rate Mortgage; this indes is used is outside the lender's control.
Most lenders tie ARM interest rate adjustments to changes in an index. Lenders base adjustable rate mortgage loan interest rates on a variety of indexes.
The measure of interest rate changes that the lender uses to decide how much the interest rate on an Adjustable Rate Mortgage will change over time.
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable-rate mortgage and that earned by other investments. These investments include one-, three-, and five-year U.S. Treasury Security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average cost-of-funds (CoF) incurred by savings and loans. The index is used to adjust the interest rate up or down on an adjustable mortgage.
A number used to compute the interest rate for an adjustable-rate mortgage (ARM). The index is generally a published number or percentage, such as the average interest rate or yield on Treasury bills. A margin is added to the index to determine the interest rate that will be charged on the ARM.. This interest rate is subject to any caps that are associated with the mortgage.
() A published interest rate to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. Some commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).
A published interest rate, such as the prime rate, LIBOR, T-Bill rate, or the 11th District COFI. Lenders use indexes to establish interest rates charged on mortgages or to compare investment returns. Also a statistic to measure market performance. A popular index is the Standard & Poor's 500, which incorporates a broad base of 500 stocks.
The index is the measure of interest rate changes a lender uses to decide the amount an interest rate on an ARM will change over time.The index is generally a published number or percentage, such as the average interest rate or yield on Treasury bills. S
The base for rate changes that the lender uses to decide how much the annual percentage rate will change over time.
A published interest rate tied to an ARM loan's interest rate. The index is not controlled by the lender. The index and the interest rate linked to it may increase or decrease.
A financial rate used by lenders for calculating variable rate loans, such as an ARM.
An interest rate that is not controlled by the lender and is used in an Adjustable Rate Mortgage (ARM).
A published interest rate used to establish the interest rate offered on an Adjustable Rate Mortgage (ARM). Some of the most common indices are treasury bills, treasury securities, London Inter-Bank Offering Rates (LIBOR) and the Cost of Funds Index (COFI).
A published rate plus a margin that determines interest rates on an adjustable-rate mortgage.
A number, usually a percentage, upon which future interest rates for adjustable rate mortgages are based. Some commonly used indexes include the 1-Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one- three-, and five-year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average costs-of-funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down.
an economic indicator or interest rate which is the basis that determines changes in the interest rate of an Adjustable Rate Mortgage (ARM). ARM rates are adjusted to reflect changes in the index.
A published interest rate compiled from other indicators such as U.S. Treasury bills or the monthly average interest rate on loans closed by savings and loan organizations. Mortgage lenders use the index figure to establish rates on adjustable rate mortgages (ARMs).
A market indicator used to determine the interest rate for an adjustable rate mortgage. Common indexes include one-year treasury securities and the 11th District Cost of Funds. The actual interest rate is calculated by adding the margin to the index.
In relation to mortgages and loans, an index is a published interest rate, such as the Bank of England base rate, or the London Inter Bank Offer Rate (LIBOR), which is used to base the interest rate on a variable rate mortgage or loan.
An index is a money market rate such as the prime rate or a Treasury bill that lenders use to determine interest rates for the loans they offer to customers. An index is used almost exclusively for variable rate loans.
A published rate not under the lender's control to which the lender adds a margin to determine the interest rate in a variable rate loan. One example of an index is The Wall Street Journal Prime Rate. Interest Rate The periodic charge, expressed as a percentage, for use of credit.
An index is an objective, published figure (not controlled by the lender) used to establish a lending rate. Some common indices are the London Interbank Offered Rate (LIBOR) and the Prime Rate as listed in the Wall Street Journal.
An economic indicator that lenders use to calculate interest rate adjustments for adjustable-rate mortgages (ARMs). The index used is outside the lender's control.
The published index of interest rates on a publicly traded debt security used to calculate the interest rate for an ARM. The index is usually an average of the interest rates on a particular type of security such as the LIBOR.
A published interest rate against which lenders measure the difference between the current interest rate on an adjustable-rate mortgage and that earned by other investments, which is then used to adjust the interest rate on an adjustable-rate mortgage. Examples include LIBOR, the Prime Rate and Treasury indices. The Wall Street Journal publishes index information.
A published interest rate that is used to determine the actual rate charged with a variable interest rate account. The prime rate, published in the Wall Street Journal, is often used as the index.
The index is a base interest rate used to calculate the interest rate that will be charged on a variable rate loan. The rate you will pay on a variable rate loan is usually a set percentage above the base rate, or the index.
Table of Content s. Also, a published measure of change, such as indices representing the cost of living, inflation, and relative labor and material rates, etc. [D02837] RMW
A table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes for adjustable-rate mortgages and other variable rate loans such as credit card debt. Some of the most common indices are: the one-year Treasury Constant Maturity Yield; the Federal Home Loan Bank (FHLB) 11th District Cost of Funds; prime rate as listed in the Wall Street Journal.
A measuring device used to determine if interest rates have gone up or down over a specific period of time. Adjustable rate mortgages are typically associated with how an Index fluctuates. There are a number of different types of indexes (indices).
A number used to compute the interest rate for an adjustable rate mortgage (ARM). The index is generally a published number or percentage, such as the average interest rate or yield on Treasury bills. A margin is added to the index to determine the interest rate that will be charged on the ARM. Some lenders provide caps that limit how much the interest rate or loan payments may increase or decrease.
A published rate that serves as a base for the interest rate charged on a home equity line and also as the base for rate changes used by the lender.
A published interest rate which lenders will use to structure adjustable loans (such as one- three-, and five-year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, the monthly average costs-of-funds incurred by savings and loans and LIBOR). The index is the part that changes (to which the margin is then added) and is then used to adjust the interest rate on an adjustable mortgage up or down.
A published interest rate used for adjustable-rate mortgages.
A way to measure and adjust the interest rate, such as the commonly used index, the Treasury bill.
Any rate published by an independent third party (the government, the federal bank, etc.) which serves as the base for calculating a variable item in a contract. A Variable or Adjustable Rate Mortgage may use the Federal Bank's monthly prime interest rate as the index for the interest charged under that mortgage. Check other index's such as L.I.B.O.R. (London International Offered Rate), 6 Month Treasury, 1 Year Treasury.
A barometer for measuring and adjusting the interest rate. A commonly used index is the Treasury bill.
A number, usually a percentage, upon which future interest rates for adjustable rate mortgages are based. Common indexes include the Cost of Funds (COFI) for the Eleventh Federal District of banks or the average rate of a one year Government Treasury Security or the London Interbank Offering Rate (LIBOR).
An independent, published rate used to set the interest rate on an adjustable rate mortgage (ARM). The most common indexes are the 1 year T-bill, the 11th District COFI, and the LIBOR (London Interbank Borrowing Rate). The ARM interest rate is determined by adding a margin to the chosen index. The different indexes vary in their volatility, and so consumers choice of an index may depend on the state of interest rates. For example, in times of low rates, a slow-to-change index may be preferable.
Any ARM adjustments must be based on the movement of an independent index that is beyond the control of the lender and that can be easily verified by the borrower.
A reference point to use to adjust your mortgage to go up or down as general market rates move. It is a published rate against which your adjustable rate mortgage is adjusted. Common indexes are 1-Year T-Bills, Cost-of-Funds Index (COFI, or coffee), and London Interbank Offered Rate, or LIBOR. The rate against which lenders measure the difference between the current rate on adjustable rate loans and that earned by other investments, (U.S. Treasury security yields, monthly average interest rate on loans closed by savings and loans, and monthly average costs-of-funds incurred by savings and loans), which is then used to adjust the interest rate up or down.
A factor used to calculate the interest on an adjustable rate mortgage.
An index is the benchmark interest rate used by lenders to price loans. For residential mortgage lending in the U.S., 10-year U.S. Treasurys are often used for 30-year mortgage loans (on average, most homeowners live in their homes for a period of time closer to 10 years than 30 years). For adjustable-rate mortgage loans, the two most common indexes are the one-year, constant maturity-adjusted Treasury bill and the Eleventh District Cost of Funds Index (COFI), published by the Federal Home Loan Bank of San F rancisco, a federally chartered thrift institution.
A predetermined, published interest rate used as a "base" to determine the new interest rate on an Adjustable Rate Mortgage ( ARM) when it is time for the rate to change. To this "base" rate a margin is added to determine the rate for that period until the next scheduled rate change. Usually the index will be tied to the 1 Year Treasury Bill, 6 Month LIBOR, or the 11th District Cost of Funds (COFI).
The published cost of money that serves as the minimum basis for determining the interest rate for an adjustable-rate mortgage. Among the commonly used indices are the prime rate, the London Interbank Offering Rate (LIBOR), the Cost of Funds (COF) and the one-year Treasury Bill.
A nationally monitored and published financial performance indicator chosen by a lender as the base rate for an ARM note. Typical indexes include the Cost of Funds Index, one year and six month Treasury Bill Indexes, and the LIBOR Index.
A published interest rate - such as the Prime Rate, LIBOR, T-Bill rate, or the 11th District COF - against which lenders compare other investments. Lenders use an index to establish and adjust interest rates on adjustable mortgages, or to compare investment returns. You can find these rates published in the real estate or business portion of newspapers or on the Internet. To compute the interest rate on an adjustable-rate mortgage, a predetermined margin is added to the index.
A commonly used economic indication, upon which future interest rates for adjustable rate mortgages are based. Common indexes include the Consumer Price Index or the average rate of a one year Government Treasury Security.
Most lenders tie adjustable rate mortgage interest rate changes to changes in an "index rate". These rates usually go up and down with the general movement of interest rates. First Federal uses the weekly one-year constant maturity as it's index. This index added to your margin is used to determine your interest rate.
The interest rate or economic standard that determine the changes in the monthly payments for adjustable rate or variable mortgages.
In connection with ARM loans, the external measurement used by a Lender to determine future changes which are to occur to an adjustable loan program. These will typically be published rates that are independent of the Lender's control, such as a Treasury Bill.
A published interest rate against which lenders use in adjustable rate mortgages to be added to the margin. This determines the current rate for adjustment periods.
Refers the specific fund or security yield that your adjustable rate mortgage is tied to. Also refers to the published interest rate for a specified investment used in an adjustable rate mortgage, such as a one-year treasury bill.
An index is usually a widely published market rate such as LIBOR, T-Bill or 11th District Cost of Funds (COFI). Lenders use these indices to set the interest rates charged on mortgage loans. For ARM, a predetermined margin is added to the index to calculate the interest rate adjustment.
1. Any rate published by an independent third party (the government, the federal bank, etc.) which serves as the base for calculating a variable item in a contract. (A Variable or Adjustable Rate Mortgage may use the Federal Bank's monthly prime interest rate as the index for the interest charged under that mortgage). 2. The listing in the Land Registry Office of all instruments registered on title to a property (the "abstract index").
A number based on interest rate changes in specific financial markets. The interest rate on your loan is the sum of the index value plus an additional amount called a "margin." For example, interest rates on adjustable rate loans change in accordance with changes in certain index values (see Certificates of Deposit Index, Cost of Funds Index, Cost of Savings Index, London Interbank Offered Rate Index, Prime Rate, Treasury Constant Maturity Index).
The interest rate to which changes in an adjustable-rate-mortgage are pegged.
An interest rate indicator used to determine changes in the mortgage interest rate of adjustable rate mortgages. Average rates on Treasury bills or Treasury securities over a specified period of time are often used.
A nationally published financial measure of economic conditions usually relative to other financial instruments such as bonds or Treasury Bills. The lender uses a particular index (such as the 6 month Treasury Bill) to calculate your particular monthly payment by adding a fixed margin to the index. The margin is the lenders profit and is over and above the normal index because of the assumption of loan risk. Your lender will adjust the interest on your ARM at regular time intervals also called adjustment intervals (like 6 months), by adding their particular margin to the particular index of the loan. The amount the loan is adjusted is also controlled by a periodic cap (the maximum amount the loan can change during your particular adjustment interval), the monthly cap (the maximum amount the monthly payment can change from one adjustment interval to the next), and the lifetime cap (the total amount the loan can change from the initial rate of the loan).
In real estate, an index is a table of yields or interest rates being paid on debt (such as Treasury notes or bank deposits) that is used to determine interest-rate changes.
Published economic indicator, which lenders use to establish interest rates
A measure that tracks changes in interest rates in the investment markets. Used by lenders to determine interest rates for Adjustable Rate Mortgages (ARM).
The index is the measure of the overall level of interest rates that the lender uses as a reference to calculate the specific interest rate on an adjustable-rate loan. The index plus the margin is the formula for determining the interest rate on an adjustable-rate mortgage. One index used on some mortgages is the six-month treasury bill. If the going rate for these treasury bills is 5.5 percent and the margin is 2.5 percent, your interest rate would be 8 percent. Other common indices used are certificates of deposit index, 11th District Cost of Funds index, and LIBOR index.
A published interest rate, such as prime rate, LIBOR, T-Bill, or the 11th District COFI. Lenders use indexes to establish interest rates charged on mortgages or to compare investment returns. On ARMs, a predetermined martin is added to the index to compute the interest rate adjustment.
The interest rate on an Adjustable Rate Mortgage (ARM) is tied to an index, or published interest rate, which is not controlled by the mortgage lender. The interest rate and its connecting index may fluctuate. Other variable rate loans, such as credit card debt, are also connected to indexes.
A published interest rate against which a lender measures the difference between the current interest rate on an adjustable rate mortgage and that earned on other investments, which is then used to adjust the interest rate.
Utilized to set interest rates, such as the six-month Treasury bill rate.
A measure of interest rate changes used to adjust the interest tare of an Adustable Mortgage Loan, Example: the change in U.S. Treasury secutities (t-bills) with a 1-year maturity, based upon their weekly average yield.
A published interest rate against which lenders measure the loan rate. The lender then uses it to adjust the interest rate on an adjustable mortgage up or down. The rate must generally be one that is outside the influence of the lender. (See Margin)
A market fund rate that may be tied to an adjustable rate.
a published interest rate, such as the prime rate, LIBOR, T-Bill rate or the 11th District COF. Lenders use indexes to establish interest rates charged on mortgages or to compare investment returns. A predetermined margin is added to the index to compute the interest rate on the ARM.
A published rate such as One-Year Treasury Rate and the Prime Rate that is used by lenders to calculate the interest adjustments on ARM loans. This index can vary from lender to lender and will vary depending on the loan program.
The interest rate or adjustment standard which determines the changes in monthly payments for an adjustable rate loan.
Published financial tables use by lenders to calculate the rates charged for adjustable rate mortgages.
A published interest rate not controlled by the lender to which the interest rate on an Adjustable Rate Mortgage (ARM) is tied. The index and the interest rate linked to it may increase or decrease.
Financial tables used by lenders to calculate interest rates on adjustable mortgages and on Treasury bills.
A moving financial reference rate upon which interest rate changes are based. Indices used on Adjustable Rate Mortgages are not controlled by the lender, and their movement generally reflects that of prevailing mortgage rates. Common indices include one, three, and five year government Treasury Securities.
The measure of interest rate changes that a lender uses to decide how much the interest rate on an ARM will change over time. A good question to ask your lender is how the index for any ARM you are considering has changed in recent years, and find out where it is reported.
Any number of economic indicators lenders use to calculate interest rate adjustments for adjustable rate mortgages. Examples include the 12-MTA, 11th District Cost of Funds, and LIBOR rates.
A published interest rate which is used to adjust the interest rate for an ARM.
A number, usually a percentage, upon which future interest rates for adjustable rate mortgages are based. Common indexes include the Cost of Funds for the Eleventh Federal District of banks or the average rate of a one year Government Treasury Security. Interest Rate--The periodic charge, expressed as a percentage, for use of credit.
A published interest rate used to determine the variable interest rate on an adjustable-rate mortgage loan.
A published statistical report that indicates changes in the cost of money (market interest rates), used as the basis for interest rate adjustments in an ARM.
A published rate used by lenders to calculate the interest adjustments on adjustable rate loans. One common index used today is the "One Year U.S. Treasury Security Index," a mixed group of U. S. treasury bills whose average maturity is one year. The rate is published weekly by the U. S. treasury Department.
A benchmark on which changes to an ARM's interest rate are based. Common indices include: industry cost of funds, 6-month Libor, and various term treasury notes.
A measure of interest rate changes used to determine changes in an ARM's interest rate over the term of the loan.
A way of measuring some aspect of economic activity. For example, interest rates on adjustable rate loans change in accordance with changes in certain index values.
A published measure of the cost of money that lenders use to calculate the rate on an adjustable rate mortgage (ARM). The most common indexes are the one-year Treasury Constant Maturity Yield and the FHLB 11th District Cost of Funds. Back
The economic indicators used to calculate rate adjustments on adjustable mortgage loans.
A statistic that indicates some current economic of financial condition. Indexes are used to make adjustments in variable rate loans.
A published rate used by lenders that serves as the basis for determining interest rate changes on ARM loans.
Used by lenders to calculate the interest adjustments on variable rate loans. Most programs use either the 11th District Cost of Funds or the 1-year Treasury Rate as the index. Some indexes are more volatile than others; this can affect the adjustments in your interest rate and subsequently your monthly payment.
The index is the measure of interest rate changes that the lender uses to decide how much the interest rate on an ARM will change over time. No one can be sure when an index rate will go up or down. To help you get an idea of how to compare different indexes, the following chart shows a few common indexes over a ten-year period (1977-87). As you can see, some index rates tend to be higher than others, and some more volatile. (But if a lender bases interest rate adjustments on the average value of an index over time, your interest rate would not be as volatile.) You should ask your lender how the index for any ARM you are considering has changed in recent years, and where it is reported.
Basis for adjustment as stated in the Note. Indices include COFI (Cost of Funds Index-based on banks cost of funds; this is the most stable index), 1 Year Treasury, 6 Months CD, Libor (a European Index), etc. The Index fluctuates. When the index is added to the Margin it gives you the ‘Fully indexed Rate” This rate may be limited by a Payment Cap or Lifetime Cap
The interest rate indicator used to determine changes in the mortgage rate. An index reflects current economic conditions and is published regularly for use by lenders. Popular indexes are Treasury bills and Treasury securities.
A number used to compute the interest rate for an adjustable-rate mortgage (ARM). The index is usually a widely published number or percentage, such as the average interest rate or yield on Treasury bills. The index is added to a margin to determine the interest rate that will be charged on the ARM.
the base interest rate used to calculate the interest rate on a variable rate loan. Lenders typically set their loan rate at a set percentage (say 3%) above the index or base rate.
A number, usually a percentage, upon which future interest rates for adjustable rate mortgages are based. Common indexes include treasury bills or securities, London Inter-bank Offering Rates (LIBOR) and Cost of Funds Index (COFI).
A published interest rate composite used by lenders. Its movements determine interest adjustments on adjustable rate loans.
A published rate used by lenders to calculate interest adjustments on ARMs (Index+Margin=Interest Rate). Some indexes are more volatile than others. Some common indices are 1 year Treasury bills, COFI (Cost of Funds Index) and 6 month LIBOR (London Interbank Offered Rate).
This is a published interest rate to which the interest rate on an ARM is tied. Some of the commonly used indices include the 1 Year Treasury Bill, 6 Month LIBOR, and the 11th District Cost of Funds (COFI).
Most lenders generally tie adjustable rate mortgage loan ( ARM) interest rate changes to an "index." An index is a widely published rate such as LIBOR, T-Bill, or 11th District Cost of Funds (COFI). Lenders use these indices to establish the interest rates charged on mortgage loans. For ARMs, a predetermined margin is added to the index to compute the interest rate adjustment.
An economic measurement that is used to measure periodic interest rate adjustments for an adjustable rate mortgage.
The index is the base rate used by the lender to calculate the interest rate a borrower pays on their loan.
An average banking/treasuries compulation used to make adjustments in adjustable rate loans. Common indecies areaverage CD rate, cost of living, etc.
(Also called "Rate Index"). A regularly published rate, independent of the lending institution, that measures the prevailing cost of funds, and is used periodically with the margin to set AML accrual rates.
The unit established to help set an adjustable rate mortgage (ARM)
1. Measurement used by lenders in a market to determine changes in an accrual rate. This can be based on a published, independent measure of current interest rates, such as a Treasury Bill. An index must be readily verifiable by the borrower and beyond the control of the lender. It provides a guideline that should accurately reflect the current cost of lending money. 2. A measure of prevailing market interest rates. The index used with the margin to determine a new interest rate at the time of adjustment. If the index increases, the interest rate increases unless an interest rate cap is reached. Often, these interest rates are the rates for US Treasury securities. Treasury securities have become popular as indexes because they are easy to monitor and reflect economic conditions accurately.
Published tables complied from other indicators (such as U.S. Treasury bills). Lenders use the index figure to establish rates on adjustable rate mortgages (ARM's).
a measurement used by lenders to determine changes to the Interest rate charged on an adjustable rate mortgage.
A published rate compiled from current economic or financial indicators such as U.S. Treasury bills or the prime rate published in the major daily newspapers. Mortgage lenders use the index to establish interest rates on adjustable rate mortgages and home equity lines of credit with periodic interest rate adjustments.
A table showing the yields or interest rates on certain classes of debt. The prime rate is the most common such index, but there are many others. Indexes are commonly used to set the interest rates on adjustable-rate mortgages, home equity lines of credit and variable credit cards.
1. A short-term money market rate used as the coupon basis for a floating rate security. Examples, which are generally published in financial media, include the Prime rate and LIBOR. 2. A statistical yardstick composed of a basket of securities with a set of characteristics. An example of this would include the S&P 500 which is an index of 500 stocks or the Lehman Aggregate for bonds.
regularly published statistical measure of widely accepted rates that changes periodically
Any rate published by an independent third party (the government, the federal bank, etc.) which serves as the measuring device used to determine if interest rates have gone up or down over time. A wide variety of indexes may be used with Adjustable Rate Mortgages. back
An index used to adjust the interest rate of an adjustable rate mortgage loan. For example: the change in US Treasury securities (T-bills) with a 1 year maturity. The weekly average yield on securities, adjusted to a constant maturity of one year, which is the result of weekly sales, may be obtained weekly. This change in interest rates is the "index" for the change in the specific adjustable rate mortgage.
An enumeration that graphs the current economical situation. Indexes are then used to change the rate of the loan.
A published interest rate used by lenders to compare the interest rate for an adjustable-rate mortgage (ARM) with that earned by other investments (e.g., the yield on Treasury bills, interest rate on loans from savings and loans institution, etc.), as a r
When used in a note or credit agreement, the measurement used to decide how much the annual percentage rate will change at the beginning of each adjustment period. Generally, the index plus margin equals the new rate that will be charged, subject to any caps. Different lenders use different index rates (cost of funds index, prime rate and so forth).
