Interest Rate Index

Interest Rate Index

The specific interest rate series to which the interest rate on an ARM is tied, such as “Treasury Constant Maturities,One-Year,” or “Eleventh District Cost of Funds.”

See Adjustable Rate Mortgage (ARM)/ARM Rate Indexes.

References in periodicals archive ?
Short-term loans, with terms of seven years or less, can be cheaper now with a floating rate because the all-in cost (equal to the LIBOR Interest rate index plus a bank's rate spread) on an adjustable loan is generally lower than the cost of a fixed-rate product.
However, the use of an interest rate index for determining the rate of return on Islamic financial instruments cannot be considered desirable as interest is prohibited under Islamiclaw.
Interest rate index and reset features: The variable rates in both the hedged obligation and the interest rati" swap must be determined using the same index and subject to the same reset periods.
ARMs have interest rates that increase or decrease as a market interest rate index changes.
Others say a variety of regulatory changes -- including a move to let issuers tie in-force premiums to an interest rate index -- could make their companies more interested in returning to the LTCI market.
The bank announced that Antony Jenkins, 51, would fill the post vacated by the resignation of Bob Diamond in the wake of a scandal over attempts to manipulate a key interest rate index.
The joint committee of MPs and peers, under the chairmanship of Treasury Committee chairman Andrew Tyrie, will look into the culture and practices of the industry, following the scandal of manipulation of the Libor interest rate index by traders at Barclays.
These are more commonly associated with revenue bonds where an organization's income may depend on a particular interest rate index, yet the debt the organization has issued is based on a different index.
Under the new card law, credit card issuers can issue cards with interest rates that are pegged to an objective, widely promulgated interest rate index, such as the Federal Reserve's prime interest rate.
Interest Rates are at historic lows--as of press date, the interest rate index most commonly used for hotel loans, the 10-year treasury, is hovering around 4%.
For instance, if six-month LIBOR is used for the interest rate index, cash flows would be exchanged every six months.
Derivative products are financial instruments whose own value is "derived" from or based upon the value of other assets or on the level of an interest rate index.