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| One-year MTA |
| By Bankrate.com |
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This week |
Month ago |
Year ago |
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One-Year MTA
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2.479 |
2.664 |
4.863 |
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What it means: This index
is an average of the monthly one-year Treasury adjusted to constant
maturity for the past 12 months. Yields on Treasury securities at
constant maturity are determined by the U.S. Treasury from the daily
yield curve. That is based on the closing market-bid yields on actively
traded Treasury securities in the over-the-counter market.
How it's used:
It's an index that is used to set the cost of variable-rate loans,
particularly adjustable-rate mortgages (ARMs). Lenders use such an
index, which varies, to adjust interest rates as economic conditions
change. They then add a certain number of percentage points called
a margin, which doesn't vary, to the index to establish the interest
rate you must pay. When this index goes up, interest rates on any
loans tied to it also go up. Since this index is an annual average
of the monthly one-year CMT yield, it is less volatile than other
indexes that are not smoothed out over such an extended period of
time, such as the monthly one-year CMT.
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