Current Index Value

AAA

DEFINITION of 'Current Index Value'

The most recently published value of an underlying interest rate that is used to calculated the current payment index of an adjustable-rate mortgage (ARM). The most commonly used indexes for ARMs in the United States are LIBOR, the 11th District Cost of Funds Index (COFI) and the Cost of Savings Index (COSI). These indexes are published monthly or weekly, and the current value plus the spread specified in the mortgage contract will determine the coming month's interest payment for the borrower.


INVESTOPEDIA EXPLAINS 'Current Index Value'

Each lender will have his or her own date guidelines for determining current ARM rates. If a given lender uses the index rate as it stands 10 days prior to assigning that month's interest rate, the borrower may need to look back at a previously published value of the index to find the rate that applies for the upcoming payment period.


RELATED TERMS
  1. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ...
  2. ARM Index

    The benchmark interest rate to which an adjustable rate mortgage ...
  3. Indexed Rate

    An interest rate charged on loans to borrowers that is calculated ...
  4. Adjustable-Rate Mortgage - ARM

    A type of mortgage in which the interest rate paid on the outstanding ...
  5. 11th District Cost of Funds Index ...

    A monthly weighted average of the interest rates paid on checking ...
  6. Cost Of Savings Index - COSI Index

    A popular index used for certain adjustable-rate mortgages (ARMs). ...
Related Articles
  1. ARMed And Dangerous
    Insurance

    ARMed And Dangerous

  2. Mortgages: Fixed-Rate Versus Adjustable-Rate
    Credit & Loans

    Mortgages: Fixed-Rate Versus Adjustable-Rate

  3. The Fuel That Fed The Subprime Meltdown
    Personal Finance

    The Fuel That Fed The Subprime Meltdown

  4. What is the difference between a 2/28 ...
    Investing

    What is the difference between a 2/28 ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center