Rate Index

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Rate Index

A mortgage rate index is used as a baseline for mortgage interest rates. The US Treasury bond, Prime Rate, and LIBOR are examples of mortgage rate indexes.

For example, the 1-year U.S. Treasury security (T-bill) could be used as a mortgage index. For an adjustable mortgage, the change in your interest rate is based on the change of the 1-year U.S. Treasury security. Be sure to read the details in your mortgage to see how often the rate adjusts. Some loans can adjust every few months, while others adjust every few years.

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