General Mortgage KnowledgeQuestion 114 of 400
On an adjustable-rate mortgage, the published economic benchmark that moves the interest rate up or down at each adjustment is called the:
a.Margin
b.Index
c.Cap
d.Note rate
Explanation
The index is the market benchmark (such as SOFR) that fluctuates; the lender adds a fixed margin to it. Caps limit how much the rate can change, and the note rate is the rate actually charged on the note.
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