Constant Maturity Treasury Indexes

Constant maturity Treasury indexes are used on regular basis by lenders to set the interest rates on adjustable rate mortgages.

The Fed’s latest target interest rate cut (range of zero to 0.25%), lowered the rate on which the majority of adjustable-rate mortgages are based. The 1 Yr T. CMT index is used to set the cost of variable-rate loans, particularly ARMs. The index, known for its volatility, responds quickly to changes in economic conditions.