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Mortgage (ARM) Indexes

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Which Index Is Better?

Mortgage (ARM) Index Comparison Tool
{ Interest-Only ARM Interest Cost Calculator }

As it is noted on the Mortgage Professor's website, a less favorable index can be offset by a smaller margin (read full article). The Mortgage Professor's index rankings showing the difference in margin that you should receive as compensation for accepting a less favorable index are as follows:

Index Add-on to Margin
COFI, MTA 0.00
1-Year CMT, 6-Month CD, 6-Month LIBOR 0.15
3-Year CMT 0.65
Prime Rate 1.30

Based on 15-year moving averages of these indexes, we would suggest the following rankings:

Index Add-on to Margin
COFI 0.00
1-Month LIBOR 0.10
1-Year CMT, MTA, 6-Month CD 0.15
6-Month LIBOR 0.30
3-Year CMT 0.60
Prime Rate 2.75

Feel free to build your own rankings using the calculator provided below.

The calculator compares interest costs on up to 16 interest-only ARM mortgages over the date range chosen. The calculation results are based on historical performance of the most popular ARM indexes over the last 15 years and depend on the loan amount and the margin. The calculator helps you decide which of the 16 mortgage indexes you should select based on the lowest interest cost.

For each of the ARM indexes selected the calculator displays:

  • Index Value
  • Interest Rate (the margin is added to the index value)
  • Monthly Payment (interest-only)
  • Total Interest Paid
 Index  Margin
 1-Year CMT
 3-Year CMT
 5-Year CMT
 3-Month CD
 6-Month CD
 CODI
 COSI
 MTA
 3-Month T-Bill
 6-Month T-Bill
 Prime Rate
 11th District COFI
 1-Month LIBOR
 3-Month LIBOR
 6-Month LIBOR
 1-Year LIBOR
1-Year Average of
Loan Terms:
 
Loan Amount:
 
$
Adjustment Period:
 
Choose the Date Range:
 
From:
 
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