CMT Index, CMT ARM Loans
Constant-maturity Treasury (CMT) indexes follow the weekly or monthly fluctuations in the yields for 1-year Treasury bills. The rates on CMT-indexed ARMs move up and down fast. Most CMT-indexed mortgages are adjusted once a year.
CMT Based ARM Mortgages
CMT-indexed loans are among the most popular ARMs. Roughly half of all ARMs are based on the CMT. The CMT is often referred to as the T-Bill or Treasury Bill rate. The CMT isn't a single security or note. It is the average of the interest rates of all the treasury debt that is maturing in the coming 12 months.
CMT ARMs offer exceptional options for move-up borrowers and those who do not intend to stay in their homes for long periods. CMT ARMs also provide an attractive alternative if you purchase or refinance, allowing you to obtain home financing at initial rates that in many cases are below those for fixed-rate mortgages.
Many ARMs offer a low rate as a "teaser" for the first six months or year, or maybe even longer. After the introductory period is over, the loan will be pegged to the CMT, plus a specified interest rate (margin). In many cases it will be the CMT, plus two-and-one-half percent. This depends upon your lender and your own individual loan.
Your first step should be to run the numbers on our web site to get an idea about CMT and other ARM loans, quote rates and closing costs. Then, use our network of ARM lenders and expert mortgage specialists to find the best loan for your property.