Margin
A margin is the fixed percentage a lender adds to the index to set an adjustable-rate mortgage's fully indexed rate.
What Margin means
Set at origination, the margin never changes over the loan's life, while the index moves with the market. Index plus margin, within caps, equals the rate after each adjustment.
Florida example
A Florida ARM with a 2.25% margin tied to a 4.5% SOFR index produces a 6.75% rate at adjustment. A lower margin means a cheaper rate when the ARM resets, so it's worth comparing.
What margin is
Margin is the fixed percentage a lender adds to the index on an adjustable-rate mortgage. Index plus margin equals your new rate after the fixed period.
The margin stays the same for the life of the loan, even as the index moves.
Why it matters
A lower margin means a lower rate when your ARM adjusts. It is a key number to compare between ARM offers.
We break down every part of an ARM for you. Reach out and we will show how margin shapes your payment.
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Verify the details for your own situation against these government and agency sources: CFPB adjustable-rate mortgage guide and CFPB Owning a Home guide.