• filter:

Penfed 5/5 Index

  • Page :
  • 1
  • Text Only
  • Search this Topic »
Voting History
rated:
Does anyone know what the Penfed 5/5 ARM indexes to for the interest rate after the initial 5 year term? I'm struggling to find it and am debating about the speed at which I will pay it down.

Member Summary
Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

rated:
Is there something specific you are trying to ask that is not on the Penfed website?   The 5/5 is an Adjustable Rate, so it "adjusts" every 5 years, but it caps at 2% increase each 5-year period, and 5% overall.

How are interest rates determined?  

Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

And...Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease. Normal index rates would be the Prime Rate, the Federal Funds Rate, possibly LIBOR. 

Normal index rates would be the Prime Rate, the Federal Funds Rate, LIBOR
       
       
       


rated:
For most of their recent 5/5 ARMs it was the "5-Year Treasury Constant Maturity Rate" that it is indexed to. You would have to check your loan papers to be sure though.
http://www.bankrate.com/rates/interest-rates/5-year-treasury-bil...

rated:
Morty said:   Is there something specific you are trying to ask that is not on the Penfed website?   The 5/5 is an Adjustable Rate, so it "adjusts" every 5 years, but it caps at 2% increase each 5-year period, and 5% overall.

How are interest rates determined?  

Interest rates fluctuate based on a variety of factors, including inflation, the pace of economic growth, and Federal Reserve policy. Over time, inflation has the largest influence on the level of interest rates. A modest rate of inflation will almost always lead to low interest rates, while concerns about rising inflation normally cause interest rates to increase. Our nation's central bank, the Federal Reserve, implements policies designed to keep inflation and interest rates relatively low and stable.

And...Our ARM interest rate changes are tied to changes in an index rate. Using an index to determine future rate adjustments provides you with assurance that rate adjustments will be based on actual market conditions at the time of the adjustment. The current value of most indices is published weekly in the Wall Street Journal. If the index rate moves up so does your mortgage interest rate, and you will probably have to make a higher monthly payment. On the other hand, if the index rate goes down your monthly payment may decrease. Normal index rates would be the Prime Rate, the Federal Funds Rate, possibly LIBOR. 

Normal index rates would be the Prime Rate, the Federal Funds Rate, LIBOR

       
       
       


  Yeah - exactly what is the index for the 5/5 product? The next response from kb2120 addresses it. 

Thanks guys.

rated:
As stated above it is the Five-Year Treasury Constant Maturity +2%.

However, Penfed has routinely offered reset rate deals for those about ten months or so away from resetting....usually the current promo rate - 0.0625%. So today the reset lock in deal would be 2.93%.

For me my loan would have reset to about 4.1% based on the five year treasury, but I was able to lock in 3.05% for the next five years by taking the deal.

rated:
Check your docs too. My docs give a minimum rate it will reset to, regardless of the indexed rate for the first reset.

  • Quick Reply:  Have something quick to contribute? Just reply below and you're done! hide Quick Reply
     
    Click here for full-featured reply.


Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017