Mortgage Glossary
Margin
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
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.
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