ARM (adjustable-rate mortgage) index is the benchmark interest rate to which an adjustable rate mortgage is tied. An adjustable-rate mortgage’s interest rate consists of an index value plus a margin.
The FIR is the current value of the rate index used by the ARM, plus a margin which varies from one transaction to another, but stays the same through the life of any one ARM. For example, a widely used index on monthly ARMs is COFI, standing for cost of funds index.
Which Of These Describes How A Fixed-Rate Mortgage Works? Adjustable Rate Mortgage Mortgage rates move down for Friday – Several closely watched mortgage rates were down today. The average rates on 30-year fixed and 15-year fixed mortgages both slid down. The average rate on 5/1 adjustable-rate mortgages, or ARMs, the.