Fully Indexed Rate

Also found in: Acronyms.

Fully Indexed Rate

On an ARM, the current value of the interest rate index, plus the margin.

See Adjustable Rate Mortgage (ARM)/The Fully Indexed Rate.

The Mortgage Encyclopedia. Copyright © 2004 by Jack Guttentag. Used with permission of The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The guidance specifies that an institution's analysis of a borrower's repayment capacity should include an evaluation of the borrower's ability to repay the debt by its final maturity at the fully indexed rate, assuming a fully amortizing repayment schedule.
To be sure, it is important to note that option ARMs, unlike IO hybrids, do not qualify borrowers on the basis of the minimum payment, but on the basis of a fully indexed rate and amortized payment.
However, when the interest rate jumps up quickly to the fully indexed rate, the borrower's monthly payment is typically not enough to cover the monthly interest expense.

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