Mortgage Index

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Dictionary Says

Definition of 'Mortgage Index'

The benchmark interest rate an adjustable-rate mortgage's fully indexed interest rate is based on. An adjustable-rate mortgage's interest rate, known as the fully indexed interest rate, is comprised of an index value plus a margin. The margin tends to be constant, but the index's value is variable. Several benchmark interest rates serve as mortgage indexes.
Investopedia Says

Investopedia explains 'Mortgage Index'

Some common mortgage indexes include: the prime lending rate, the one-year constant maturity treasury (CMT) value, the one-month, six-month and 12-month LIBORs, as well as the MTA index, which is a 12-month moving average of the one-year CMT index.

The index that an adjustable-rate mortgage is tied to is an important factor in the choice of a mortgage. For example, if a borrower believes that interest rates are going to rise in the future, the MTA index would be a more economical choice than the one-month LIBOR index because the moving average calculation of the MTA index creates a lag effect. 
Search results for

'Mortgage Index'

  • How Interest Rates Affect The Housing Market

    http://www.investopedia.com/articles/pf/07/mortgage_rate.asp
    ... The index value is variable, while the margin is fixed for the life of the mortgage. ...
    The interest rate on an adjustable-rate mortgage is tied to an index. ...

  • Adjustable-Rate Mortgage Indexes: Know Your Benchmark

    http://www.investopedia.com/articles/mortgages-real-estate/10/mortgage-indexes-know-benchmark.asp
    ... when they apply for a mortgage. When shopping for ARMs, this gives borrowers the
    ability to intentionally select or avoid a loan based on its benchmark index. ...

  • Understanding The Case-Shiller Housing Index

    http://www.investopedia.com/articles/mortgages-real-estate/10/understanding-case-shiller-index.asp
    ... The United Kingdom's major index is the Halifax House Price index, named
    after Halifax, the UK's largest mortgage lender. It also ...

  • Understanding The Consumer Confidence Index

    http://www.investopedia.com/articles/05/010604.asp
    ... Likewise, banks can anticipate a decrease in lending activity, mortgage applications
    and credit card use. When faced with a down-trending index, the government ...

  • 20 Investments: Mortgage-Backed Securities | Investopedia

    http://www.investopedia.com/university/20_investments/11.asp
    20 Investments: Mortgage-Backed Securities. ... When you invest in a mortgage-backed
    security, you are lending money to a homebuyer or a business. ...

  • Mortgage Basics: Variable-Rate Mortgages | Investopedia

    http://www.investopedia.com/university/mortgage/mortgage2.asp
    Mortgage Basics: Variable-Rate Mortgages. ... an adjustable-rate mortgage or a
    floating-rate mortgage, is a loan in which the rate of interest is subject to change. ...

  • Make A Risk-Based Mortgage Decision

    http://www.investopedia.com/articles/pf/07/mortgage_decision.asp
    ... stands at 6%, and the three-month T-bill yield is 5%, while the two-year Treasury
    note yield is 6%, we can assume that the index to which the mortgage is tied ...

  • 8 Signs Your Neighborhood Is On The Upswing

    http://www.investopedia.com/articles/mortgages-real-estate/10/8-signs-of-an-upswing.asp
    ... Index The Purchase Application Index is provided weekly and is typically made available
    on Wednesdays by the Mortgage Bankers Association. This index lets you ...

  • Reduce Interest With An All-In-One Mortgage

    http://www.investopedia.com/articles/mortgages-real-estate/08/offset-mortgage.asp
    ... Fees and Rates Most offset mortgage lenders charge a $50 to $100 annual fee on top ...
    loans are 30-year adjustable-rate vehicles that are tied to the LIBOR index. ...

  • The Alphabet Soup Of Credit Derivative Indexes

    http://www.investopedia.com/articles/optioninvestor/07/credit-der-index.asp
    ... and Behind The Scenes Of Your Mortgage.) The LCDX is a credit derivative
    index with a basket made up of single-name, loan-only CDSs. ...

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