- ARM Index
- 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 index underlying the adjustable rate mortgage is variable, while the margin is constant. There are several popular indexes used for different types of adjustable rate mortgages.
This is also referred to as the "fully indexed interest rate".
The index to which an adjustable rate mortgage is tied can make a difference over the life of the mortgage. For example, one popular mortgage index is the MTA index. It is a moving average calculation, and therefore has a "lag effect". If interest rates are expected to rise, a mortgage tied to the MTA index might be more economical than a mortgage tied to an index without a moving average calculation, such as the one-month LIBOR index. However, a borrower should consider more than the index when choosing an adjustable rate mortgage. Many other variables, such as the margin and the interest rate cap structure, are important considerations.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Knöchel-Arm-Index — Der Knöchel Arm Index, (englischer wissenschaftlicher Begriff: ankle brachial index (ABI)), Doppler Index, auch tibio brachialer Quotient (TBQ), cruro brachialer Quotient (CBQ), oder Verschlussdruckmessung genannt, wird durch Blutdruckmessung und … Deutsch Wikipedia
ARM — abbradjustable rate mortgage Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. arm … Law dictionary
ARM architecture — This article is about a computer processor architecture. For other uses, see ARM (disambiguation). Logo ARM Designer ARM Holdings Bits … Wikipedia
ARM Holdings — Infobox Company company name = ARM Holdings company company type = Public (lse|ARM, nasdaq|ARMH) foundation = 1990 location = Cambridge, England, UK key people = Doug Dunn (Chairman) Warren East (CEO) industry = RISC Microprocessors products =… … Wikipedia
index — in·dex 1 n: a numerical measure or indicator (as of inflation or economic performance) see also consumer price index index 2 vt: to link (as wages, rates, or investments) to an index under the contract wages were index ed to inflation M … Law dictionary
ARM Cortex-A8 — Designed by ARM Holdings Common manufacturer(s) TSMC Instruction set ARMv7 Cores 1 L1 cache 32 KB/32 KB … Wikipedia
Arm River No. 252, Saskatchewan — Arm River No. 252 (2006 Population 240) is a rural municipality in central Saskatchewan, Canada along Highway 11 between Saskatoon and Regina. It is located in Division No. 15. Arm River No. 252 started out with the name Girvin in December 1,… … Wikipedia
arm of the law — index judiciary, marshal, peace officer, police, posse Burton s Legal Thesaurus. William C. Burton. 2006 … Law dictionary
ARM — adjustable rate mortgage (ARM) A loan for which the interest rate ( coupon rate) is adjusted periodically to reflect changes in a previously selected index rate. ARMs may have caps and floors that limit the annual and/or the lifetime change in… … Financial and business terms
Arm — This article is about the upper part of the human upper limb. For other uses, see Arm (disambiguation). Arm The human arm … Wikipedia