Tri Counties Bank residential adjustable rate mortgages (ARMs) are now originated using the 30-day average SOFR.
SOFR (Secured Overnight Financing Rate) is the industry-recommended replacement for LIBOR. Tri Counties Bank, along with leading banks and mortgage investors such as Fannie Mae and Freddie Mac, is now using SOFR as the index for new residential ARMs.
The main difference between LIBOR and SOFR is how the rates are produced. While LIBOR was based on panel bank input, SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement market. The transaction volumes underlying SOFR regularly are around $1 trillion in daily volumes. The repurchase agreement market’s large transaction volume ensures that SOFR will be reliable through a wide range of market conditions, making it a good long-term option to replace LIBOR.
Contact Us
If you would like to discuss SOFR-based options, or had an existing LIBOR-based loan that transitioned to SOFR, please contact your Home Mortgage Loan Specialist or call 1-877-822-5626.