ARM index
The published benchmark (today usually SOFR) an adjustable-rate mortgage is tied to; when the index moves, your rate moves with it after the fixed period.
What does arm index mean?
After an ARM's fixed period ends, its rate is set as the index plus a fixed margin. The index is a public benchmark reflecting broad market rates — most current ARMs use SOFR, which replaced the older LIBOR. You do not control the index; it rises and falls with the market, carrying your rate and payment with it, bounded only by the loan's caps.
Frequently asked
What index do ARMs use?
Most current ARMs are tied to SOFR (the Secured Overnight Financing Rate), which replaced the older LIBOR. After the fixed period your rate is that index plus a fixed margin, moving up or down as the index does, within the loan’s caps.
Put it to use
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