Respuesta :
The answer is the margin.
The index serves as a benchmark interest rate that captures the state of the market as a whole. Based on the market, the index varies.
An adjustable-rate mortgage loan's interest rate fluctuates based on changes in the index and the loan's margin.
When you apply for the loan, the lender chooses which index your loan will utilize, and this decision often won't alter after closing.
When an adjustable-rate mortgage (ARM )'s rate period expires, the margin is the number of percentage points the mortgage lender adds to the index to determine your interest rate.
Your loan agreement specifies the margin, which won't change after closing. The margin amount varies according to the specific lender and loan.
The fully indexed rate is equal to the margin plus the index.
Hence, the margin is a gross profit factor added to the Index, which determines the new note rate. This number can vary from lender to lender but will remain fixed for the duration of the loan agreement.
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