Investopedia

Continue to Site »

One-Year Constant Maturity Treasury - 1-Year CMT

Filed Under » , ,
Dictionary Says

Definition of 'One-Year Constant Maturity Treasury - 1-Year CMT'

The interpolated one-year yield of the most recently auctioned four-, 13- and 26-week U.S. Treasury bills, plus the most recently auctioned 2-, 3-, 5- and 10-year U.S. Treasury notes as well as the most recently auctioned U.S. Treasury 30-year bond, plus the off-the-runs in the 20-year maturity range.
Investopedia Says

Investopedia explains 'One-Year Constant Maturity Treasury - 1-Year CMT'

The U.S. Treasury publishes the one-year CMT value on a daily basis. Official weekly, monthly and annual one-year CMT values are published respectively. The monthly one-year CMT value forms a popular mortgage index to which many fixed period or hybrid adjustable-rate mortgages (ARMs) are tied.

Some mortgages such as payment option ARMs offer the borrower a choice of indexes. This choice should be made with some analysis. Different indexes have relative values which historically are quite constant within a certain range. For example, the one-year CMT index is typically lower than the one-month LIBOR index by about 0.1% to 0.5%. When considering which index is most economical, don't forget about the margin. The lower an index relative to another index, the higher the margin is likely to be.

Articles Of Interest

  1.

    Mortgages: Fixed-Rate Versus Adjustable-Rate

    Both of these have advantages and disadvantages depending on your financial needs and prospects.

  2. Insurance Tips For Homeowners

    Use these simple ideas to save money and get better coverage for your house.

  3. Adjustable-Rate Mortgage Indexes: Know Your Benchmark

    Understanding these benchmarks can help you select the most competitive adjustable-rate loan.

  4. ARMed And Dangerous

    In a climate of rising interest rates, having an adjustable-rate mortgage can be risky.

  5. Option ARMs: American Dream Or Mortgage Nightmare?

    Option adjustable rate mortgages could make or break your home-buying experience.

  6. Why You Should Invest In Municipal Bond ETFs

    These versatile instruments have become popular with investors in higher tax brackets and fill a specific niche in the wide selection of fixed-income offerings.

  7. What is a triple tax-free municipal bond?

    At its core, a triple tax-free municipal bond is just like any corporate bond: it is a debt instrument, a loan given to a government authority or municipality in order to help it meet certain ...

  8. Besides a savings account, where is the safest place to keep my money?

    Savings accounts are safe because investors' deposits are guaranteed by the Federal Deposit Insurance Corporation (FDIC) for bank accounts or the National Credit Union Administration (NCUA) for ...

  9. How does TARP affect the economy?

    TARP - or the Troubled Asset Relief Program - is a government program created in response to the subprime mortgage crisis that began in 2007. The original goal of the program was to give the ...

  10. Treasury Bills

    Learn more about this government debt obligation and how it can fit into your portfolio.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  2. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  3. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  4. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  5. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  6. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
Trading Center