ARM Index
An ARM index is the market benchmark used with a contractual margin to calculate an adjustable mortgage's fully indexed interest rate.
ARM indexes, margins, and rate caps used to calculate and limit adjustable mortgage interest rates.
ARM Indexes and Rate Caps explains the benchmark and margin used to calculate an adjustable mortgage rate and the caps that limit specified changes.
Use ARM Index and ARM Margin to reproduce the fully indexed rate. Then apply the note’s cap, floor, rounding, and timing rules.
The executed note, adjustment notice, and published benchmark record are the primary evidence for a specific reset. Similar product labels can hide different calculations.
| Area | Use it for |
|---|---|
| ARM Index | Market benchmark named in an adjustable-rate mortgage and selected under the note’s timing rules. |
| ARM Margin | Fixed contractual percentage points generally added to the index. |
| Interest Rate Cap | Initial, subsequent, lifetime, and payment limits used in adjustable-rate products. |
Mortgage-rate content is educational and does not provide rate forecasts, borrowing advice, refinancing advice, or investment recommendations.
Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.
An ARM index is the market benchmark used with a contractual margin to calculate an adjustable mortgage's fully indexed interest rate.
An ARM margin is the fixed percentage-point amount generally added to a market index when calculating an adjustable mortgage's interest rate.