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FFIEC Rate Spread Calculator

IF THE LOAN APPLICATION DATE IS BEFORE OCTOBER 1, 2009 AND THE ACTION TAKEN DATE IS BEFORE JANUARY 1, 2010 USE THE OLD CALCULATOR.


About the Rate Spread Calculator

The rate spread calculator generates the spread between the Annual Percentage Rate (APR) and a survey-based estimate of APRs currently offered on prime mortgage loans of a comparable type utilizing the “Average Prime Offer Rates- Fixed” and “Average Prime Offer Rates- Adjustable” tables, action taken, amortization type, lock-in date, APR, fixed term (loan maturity) or variable term (initial fixed-rate period), and lien status. Rate spread is a calculated field and is NOT simply the APR on the loan application. The reporting requirement applies to originations of: home purchase loans, dwelling-secured home improvement loans, and refinancings.


Data Requirements for the Rate Spread Calculator


The calculator requires several components to successfully generate a rate spread for HMDA reporting. The required data include the action taken (provided), amortization type, lock-in date, annual percentage rate, fixed term (loan maturity) or variable term (initial fixed-rate period) and lien status.

  • Action Taken
    • The Rate Spread is reported on originated loans only, therefore, any action on the application or loan, other than an origination (Action Taken = 1), will result in a rate spread equal to 'NA'. 'NA' should be entered in the rate spread field on the LAR reporting form for any action other than “loan originated”.
  • Amortization Type
    • Amortization type must be selected. Only one option can be chosen. Based on this selection, the calculator logic will determine whether the fixed or adjustable table should be referenced to perform the calculation
  • Lock-In Date
    • Lenders are required to compare the APR on a loan at consummation with the corresponding ‘rate’ from the applicable ‘Average Prime Offer Rates” table. All loans locking from Monday through the following Sunday would use the APR posted on the previous Friday. For example, for the week of Monday through Sunday, October 12-18, 2009, new average prime offer rates would be posted on the FFIEC’s web site on Friday, October 9, but they would be dated and effective October 12. Loans that are locked in on October 9 through 11, including loans locked in on October 9 after the benchmarks dated October 12 have been posted, would be compared to the average prime offer rates for comparable transactions dated October 5 (assuming the loan application was made on or after October 1). Dates entered prior to January 3, 2000 or after the current date (today’s date) will produce a validity error. For consistency’s sake, lenders may not apply new benchmarks before the Monday following publication, even if their systems are capable of applying the new benchmarks earlier.
    • If an interest rate is set pursuant to a "lock-in" agreement between the lender and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. If a rate is re-set after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the rate is re-set for the final time before closing. If no lock-in agreement is executed, then the relevant date is the date on which the institution sets the rate for the final time before closing.
    • The lock-in date should be in mm/dd/ccyy format. The lock-in date cannot be earlier than January 3, 2000 or after the current published rate (current date) on the “Average Prime Offer Rates” tables.
  • Annual Percentage Rate (APR)
    • APR should be entered in percentage format and data entered should be in the range 00.00 to 99.99%. For example, an APR of 4.875% should be entered 04.88, including all leading and trailing zeros. If the figure is more than two decimal places, round the figure or truncate the digits beyond two decimal places.
  • Fixed term (loan maturity) or Variable term (initial fixed-rate period)
    • The loan term has a different meaning depending on whether the loan is fixed- or variable- rate. For a fixed-rate loan, the term is the loan’s maturity (i.e. the period until the last payment will be due under the loan contract. For a variable-rate loan, the term is the initial, fixed-rate period (i.e. the period until the first schedule rate reset).
    • The loan term, should be entered in years using whole numbers between 1 and 50. Terms consisting of a whole number of years and a fraction of a year should be rounded to a whole number according to the following rule: a fractional year of .5 or less should be rounded to the lower term, and a fractional year greater than .5 should be rounded to the higher term. There is an exception for a loan term shorter than six months, which should be rounded to 1.
    • If the amortization period of a loan is longer than the term of the loan – i.e., because the loan has a balloon feature- the lender should use the term when selecting the applicable yield. For example, in the case of a five-year loan that has a balloon payment because the payments are amortized over 30 years, the term of five years must be used.
    • In an Adjustable Rate Mortgage (ARM) situation, there may be a long period to maturity and a feature whereby the rate adjusts at a much earlier time -- for example, five years. In that case, as explained above, the term is the initial, fixed-rate period, not the full term to maturity. For example, a 5/30 ARM that is amortized over 30 years should use 5 as the loan term,with the initial rate fixed for the first five years.
    • If an obligation is payable on demand, the creditor shall make the disclosures based on an assumed maturity of 1 year. If an alternate maturity length is stated in the legal obligation between the parties, the maturity shall be based on that length.
  • Lien Status
    • Lenders are required to report lien status for loans they originate and applications that do not result in an origination. Lien status is determined by reference to the best information readily available to the lender at the time final action is taken and to the lender's own procedures.
    • Indicate the lien status for loans that you originate and for applications that do not result in an origination by using one of the following codes:
      • 1- Secured by a first lien
      • 2- Secured by a subordinate lien
      • 3- Not secured by a lien
      • 4- Not applicable (purchased loan)
    • If the lien status equals 1 and the rate spread calculated is less than 1.5 percentage points, the result will be a rate spread equal to 'NA'. If the lien status equals 2 and the rate spread calculated is less than 3.5 percentage points, the result will be a rate spread equal to 'NA'.
    • If the lien status is equal to 1 or 2 and the rate spread calculated is equal to or greater than 99.99%, the result will be a rate spread equal to NA.
    • If the lien status is equal to 3, not secured by a lien, the result will be a rate spread equal to 'NA'.
    • The lien status code of 4 is used to identify purchased loans on the LAR reporting form. The rate spread is NOT calculated for purchased loans and will therefore result in a rate spread equal to 'NA'.
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Rate Spread Equal to 'NA'

A rate spread equal to 'NA' is a result of one or more data parameters that do not meet the specifications for reporting the rate spread. Data parameters that will result in a rate spread equal to 'NA' are listed below.

  • The Rate Spread is reported on originated loans only, therefore, any action on the application or loan, other than an origination (Action Taken = 1) will result in a rate spread equal to 'NA'.
  • If the loan is not subject to Regulation Z, or is a home improvement loan that is not dwelling-secured, or is a loan that you purchased, enter 'NA'.
  • If the lien status equals 1 and the rate spread calculated is less than 1.5 percentage points, the result will be a rate spread equal to 'NA'.If the lien status equals 2 and the rate spread calculated is less than 3.5 percentage points, the result will be a rate spread equal to 'NA'.
  • If the lien status is equal to 1 or 2 and the rate spread calculated is equal to or greater than 99.99%, the result will be a rate spread equal to NA.
  • If the lien status equals 3, not secured by a lien, the result will be a rate spread equal to 'NA'.
  • The lien status code of 4 is used to identify purchased loans on the LAR reporting form.  The rate spread is NOT calculated for purchased loans and will therefore result in a rate spread equal to 'NA'.
  • The rate spread is not calculated on Home Equity Lines of Credit (HELOCs). If the institution chooses to report HELOCs, the rate spread should be equal to 'NA'.
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Frequently Asked Questions (FAQs)

Rate Spread Calculator
  • What is the difference in the NEW Rate Spread Calculator versus the OLD Rate Spread Calculator and how do I know which one to use?
    • The NEW Rate Spread Calculator generates the spread between the Annual Percentage Rate (APR) and a survey-based estimate of APRs currently offered on prime mortgage loans of a comparable type utilizing the “Average Prime Offer Rates- Fixed” and “Average Prime Offer Rates- Adjustable” tables, action taken, amortization type, lock-in date, APR, term, and lien status.
    • OLD Rate Spread Calculator generates the spread between the Annual Percentage Rate (APR) and the comparable treasury security utilizing the "Treasury Securities of Comparable Maturity under Regulation C" table, action taken, lock-in date, APR, term, and lien status.
    • The main differences in the two calculators are the tables referenced for determining the rate spread, the additional amortization type field, and the frequency of the table updates.
    • The NEW Rate Spread Calculator should be used when the LOAN APPLICATION DATE IS ON OR AFTER OCTOBER 1, 2009 OR THE LOAN CLOSED ON OR AFTER JANUARY 1, 2010.
    • The OLD Rate Spread Calculator should be used when the LOAN APPLICATION DATE IS BEFORE OCTOBER 1, 2009 AND THE LOAN CLOSED BEFORE JANUARY 1, 2010.
  • Rate Spread versus HOEPA, what is the difference?  
    • Rate Spread is a calculated field and is NOT simply the APR on the loan application. Rate Spread and HOEPA are two separate fields on the HMDA LAR with two separate calculations. The rate spread web site should be used only for calculating the rate spread.  
    • HOEPA covers loans secured by the borrower’s principal residence, with certain limited exceptions, BASED ON RATES OR FEES ABOVE CERTAIN THRESHOLDS OR ‘TRIGGERS’. HOEPA has an APR trigger and a points and fees trigger.
  • It is Monday but the table does not seem to have been updated for the current week. How do I view/update my “Average Prime Offer Rates” tables to reflect the most current week’s rates?  
    • If it is Monday and you cannot view or download the most current week’s rates, you may have to clear the "cache" on your web browser.
      • For example, Internet Explorer users should press the Refresh button or use the menu options View, Refresh while holding down the "Ctrl" key on your keyboard. This will refresh the current web page stored in your cache with the latest content on the web page.
      • If Refresh fails to display the updated page, you can clear your Internet Explorer cache by following the appropriate procedure below. This will delete all the files that are currently stored in your cache.
        • For Internet Explorer version 4.0:
          • On the View menu of your Internet Explorer toolbar, click Internet Options.
          • Click the General tab.
          • In the Temporary Internet files area, click Delete Files, then click OK.
          • Click OK to close Internet Options.
        • For Internet Explorer version 5.0, 5.5, 6.0:
          • On the Tools menu of your Internet Explorer toolbar, click Internet Options.
          • Click the General tab.
          • In the Temporary Internet files area, click Delete Files, then click OK.
          • Click OK to close Internet Options.
      • If the above tasks do not correct your problem, please contact your Network Administrator for assistance or email HMDAHELP@frb.gov the HMDA technical assistance line at 202-452-2016.
  • When I submitted my data for calculation I received the message "Invalid Parameters", what does this mean?  
    • Data elements entered into the Amortization Type, Lock-In Date, APR, fixed term (loan maturity) or variable term (initial fixed-rate period) and/or Lien Status field do not meet the requirements for that field. If this is the case, a red text error message will appear to the right of the field indicating the error. OR
    • The “Average Prime Offer Rates” tables are updated and posted to the FFIEC web site every Friday morning; however, the new benchmarks will be dated and effective the following Monday. The “most recently available” average prime offer rates are those most recently effective as of the date the loan's rate is set. The current date is the maximum date permitted to calculate the rate spread. Any date after the current date will result in an “invalid parameter” and error warning.
  • What term should be used when the amortization period is longer than the term?  
    • If the amortization period of a fixed-rate loan is longer than the term of the loan – i.e., because the loan has a balloon feature- the lender should use the term when calculating the rate spread. For example, in the case of a fixed-rate loan that has a five-year term to maturity and a balloon payment because the payments are amortized over 30 years, the term of five years must be used.  
    • In an Adjustable Rate Mortgage (ARM) situation, there may be a long period to maturity and a feature whereby the rate adjusts at a much earlier time -- for example, five years. In that case, as explained above, the term is the initial, fixed-rate period, not the full term to maturity. For example, a 5/30 ARM that is amortized over 30 years must use 5 as the loan term, with the initial rate fixed for the first five years.
  • What term should a lender use to find the average prime offer rate for a comparable transaction when the loan’s term to maturity (or, for an adjustable-rate loan, the initial fixed-rate period) is not in whole years?  
    • The lender should use the number of whole years closest to the actual term; if the actual term is exactly halfway between two whole years, the lender should use the shorter of the two. For example, for a loan term of 10 years and three months, enter in the rate spread calculator (or choose the column of the appropriate average prime offer rate table corresponding to) 10 years; for a loan term of 10 years and nine months, enter (or choose the column for) 11 years; for a loan term of 10 years and six months, enter (or choose the column for) 10 years. If a loan term includes an odd number of days, in addition to an odd number of months, the lender first should round to the nearest whole month, again rounding down if the number of odd days is exactly halfway between two months.  
  • Do I need to manually locate the ‘rate’ on the applicable “Average Prime Offer Rates” table to use the single or batch rate spread calculator?
    • No. When utilizing the single or batch rate spread calculator, the user does not need to manually determine the applicable 'rate'. The single and batch rate spread calculators utilize the amortization type, lock-in date, APR, term, and lien status entered by the user to determine the applicable yield for the rate spread calculation.
    • An institution will use the download and save feature of the “Average Prime Offer Rates” when utilizing the FFIEC HMDA Data Entry Software or an in-house rate spread calculation program. After successfully downloading the tables, the institution can Import the tables into the HMDA software for rate spread calculations. The “Average Prime Offer Rates” tables must be downloaded each week to ensure the applicable rates are being utilized for the rate spread calculation.
  • How do I use the "Average Prime Offer Rates” Table using the ASCII comma delimited text file format?  
    • Microsoft Excel  
      • The ASCII comma delimited text file format allows the "Average Prime Offer Rates” tables to be easily retrieved into a variety of applications, but is best viewed within one that will allow the user to easily manipulate data that is in columnar format. Microsoft Excel is an example of such an application. If you have Microsoft Excel installed on your computer, the "Average Prime Offer Rates” tables will open in Microsoft Excel by default.  
      • Column 'A' represents the 'Effective Date'. Columns 'B' through 'AY' represent the loan term.  
      • To find the applicable rate, identify the relevant date (the effective dates listed correspond to the Monday after posting and are effective until the next posting takes effect) in the left-hand column, Column 'A', and navigate across the row until the rate corresponding to the term of the loan has been reached. Loan terms are arrayed across the top, in Columns 'B' through 'AY'.  
    • Text-Editing/ Word-Processing Application  
      • If you don't have access to a spreadsheet application such as Microsoft Excel, you can also retrieve the "Average Prime Offer Rates” tables in an ASCII text-editing or word-processing application. However, these two application types cannot easily format the width of the data columns and will require a significant amount of manual reformatting to properly view the data.  
  • When I view or print the ASCII comma delimited file using Microsoft Excel, some of the fields in Column 'A' show '#####'. What do I do?  
    • When viewing the rate tables in ASCII comma delimited format using Microsoft Excel and the tables show the following characters in column A, "#####", the user must extend the width of the column. To extend the width of the column, complete the following steps;  
      • Select any cell in column 'A'.
      • Choose 'Format' on the top menu bar
      • Choose 'Column'
      • Choose 'Width'
      • Set 'Width' to 18.
  • Can I download the Rate Spread Calculator?  
    • No. The FFIEC HMDA rate spread web site does not offer the capability to download the rate spread calculator. The HMDA Data Entry Software provides installation capability for the rate spread calculator as a component of the software; however, the rate tables must be downloaded each week and imported into the software for the calculator to reference the applicable rates.
  • Can I import my loan application information into the rate spread calculator to retrieve a rate spread?  
    • No. The FFIEC HMDA rate spread calculator does not offer the capability to import loan application data. The HMDA Data Entry Software “Batch Rate Spread Calculator” located under the utilities menu provides the ability to import loan application data that meets the HMDA file specifications provided in the software Help files.
If these facts do not address your specific questions, please email HMDAHELP@frb.gov

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“Average Prime Offer Rates- Fixed” Table

The "Average Prime Offer Rates-Fixed" table is provided by the FFIEC for use in compliance with Regulation C (HMDA) and Regulation Z (TILA/HOEPA) amendments for loans with a fixed amortization effective October 1, 2009 and forward. The Average Prime Offer Rates-Fixed table is available in ASCII comma delimited format to view, print or download.

The average prime offer rates posted in the fixed table represent derived and estimated rates. The term ‘rates’ will be used consistently to represent the APRs in the “Average Prime Offer Rates” tables.

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“Average Prime Offer Rates- Adjustable” Table

The "Average Prime Offer Rates-Adjustable" table is provided by the FFIEC for use in compliance with Regulation C (HMDA) and Regulation Z (TILA/HOEPA) amendments for loans with an adjustable amortization effective October 1, 2009 and forward. The Average Prime Offer Rates-Adjustable table is available in ASCII comma delimited format to view, print or download.

The average prime offer rates posted in the adjustable table represent derived and estimated rates. The term ‘rates’ will be used consistently to represent the APRs in the “Average Prime Offer Rates” tables.

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Updating the “Average Prime Offer Rates” Tables

The “Average Prime Offer Rates” tables will be updated and posted to the FFIEC web site every Friday morning; however, the new benchmarks will be dated and effective the following Monday. The “most recently available” average prime offer rates are those most recently effective as of the date the loan’s rate is set.

There will be NO revisions to the “Average Prime Offer Rates” tables unless there is an error in a rate that is listed on one of the tables. If a revision to either table is necessary based on inaccurate information, a footnote will be placed on the FFIEC Rate Spread web site noting the date, time and nature of the update. A lender that determines the rate spread for a loan using an inaccurate rate contained in either table before the table is revised to correct the rate is not required to make a new determination for that loan after the revision has been made.

The “Average Prime Offer Rates” tables posted on this web site are a convenient source of rate data for calculating the rate spread for HMDA reporting purposes. Regulation C permits institutions to use the “Average Prime Offer Rates” contained in these tables instead of calculating their own rates by following the methodology statement below.

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Methodology for Determining the “Average Prime Offer Rates”

The calculation of average prime offer rates is based on the Freddie Mac Primary Mortgage Market Survey® (PMMS). The survey collects data for a hypothetical, “best quality,” 80% loan-to-value, first-lien loan for four mortgage products: (1) 30-year fixed-rate; (2) 15-year fixed-rate; (3) one-year variable-rate; and (4) five-year variable-rate. Each of the variable-rate products adjusts to an index based on the one-year Treasury rate plus a margin and adjusts annually after the initial, fixed-rate period. This Methodology first describes all the steps necessary to calculate average prime offer rates and then provides a numerical example illustrating each step with the data from the week of May 19, 2008.

The PMMS collects nationwide average offer prices during the Monday through Wednesday period each week and publicly releases the averages on Thursday. For each loan type the average commitment loan rate and total fees and points (“points”) are reported, with the points expressed as percentages of the initial loan balance. For the fixed-rate products, the commitment rate is the contract rate on the loan; for the variable-rate products it is the initial contract rate. For the variable-rate products, the average margin is also reported.

The PMMS data are used to compute an annual percentage rate (APR) for the 30- and 15-year fixed-rate products. For the two variable-rate products, an estimate of the fully-indexed rate (the sum of the index and margin) is calculated as the margin (collected in the survey) plus the current one-year Treasury rate, which is estimated as the average of the close-of-business, one-year Treasury rates for Monday, Tuesday, and Wednesday of the survey week. If data are available for fewer than three days, only yields for the available days are used for the average. Survey data on the initial interest rate and points, and the estimated fully indexed rate, are used to compute a composite APR for the one- and five-year variable-rate mortgage products. See Regulation Z official staff commentary, 12 CFR part 226, Supp. I, comment 17(c)(1)-10 (creditors to compute a composite APR where initial rate on variable-rate transaction not determined by reference to index and margin).

In computing the APR for all four PMMS products, a fully amortizing loan is assumed, with monthly compounding. A two-percentage-point cap on the annual interest rate adjustments is assumed for the variable-rate products. For all four products, the APR is calculated using the actuarial method, pursuant to Appendix J to Regulation Z. A payment schedule is used that assumes equal monthly payments (even if this entails fractions of cents), assumes each payment due date to be the 1st of the month regardless of the calendar day on which it falls, treats all months as having 30 days, and ignores the occurrence of leap years. See 12 CFR 226.17(c)(3). The APR calculation also assumes no irregular first period or per diem interest collected.

The PMMS data do not cover fixed-rate loans with terms to maturity of other than 15 or 30 years and do not cover variable-rate mortgages with initial, fixed-rate periods of other than one or five years. The Board uses interpolation techniques to estimate APRs for ten additional products (two-, three-, seven-, and ten-year variable-rate loans and one-, two-, three-, five-, seven-, and ten-year fixed-rate loans) to use along with the four products directly surveyed in the PMMS.

The Treasury Department makes available yields on its securities with terms to maturity of, among others, one, two, three, five, seven, and ten years (see http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml). The Board uses these data to estimate APRs for two-, three-, seven-, and ten-year variable-rate mortgages. These additional variable-rate products are assumed to have the same terms and features as the one- and five-year variable-rate products surveyed in the PMMS other than the length of the initial, fixed-rate period.

The margin and points for the two- and three-year variable-rate products are estimated as weighted averages of the margins and points of the one-year and five-year variable-rate products reported in the PMMS. For the two-year variable-rate loan the weights are 3/4 for the one-year variable-rate and 1/4 for the five-year variable-rate. For the three-year variable-rate product, the weights are 1/2 each for the one-year and the five-year variable rate. For the seven- and ten-year variable-rate products, because they fall outside of the range between the one- and five-year PMMS variable-rate products, the margin and points of the five-year variable-rate product reported in the PMMS are used instead of calculating a weighted average.

The initial interest rate for each of the interpolated variable-rate products is estimated by a two-step process. First, “Treasury spreads” are computed for the two- and three-year variable-rate loans as the weighted averages of the spreads between the initial interest rates on the one- and five-year PMMS variable-rate products and the one- and five-year Treasury yields, respectively. The weights used are the same as those used in the calculation of margins and points. For seven- and ten-year variable-rate loans, because they fall outside of the range between the one- and five-year PMMS variable-rate products, the spread between the initial interest rate on the five-year PMMS variable-rate product and the five-year Treasury yield is used as the Treasury spread instead of calculating a weighted average. The second step is to add the appropriate Treasury spread to the Treasury yield for the appropriate initial, fixed-rate period. All Treasury yields used in this two-step process are the Monday-Wednesday close-of-business averages, as described above. Thus, for example, for the two-year variable-rate product the estimated, two-year Treasury spread is added to the average two-year Treasury rate, and for the ten-year variable-rate product the five-year Treasury spread is added to the average ten-year Treasury rate.

Thus estimated, the initial rates, margins, and points are used to calculate a fully-indexed rate and ultimately an APR for the two-, three-, seven- and ten-year variable-rate products. To estimate APRs for one-, two-, three-, five-, seven-, and ten-year fixed-rate loans, respectively, the Board uses the initial interest rates and points, but not the fully-indexed rates, of the one-, two-, three-, five-, seven-, and ten-year variable-rate loan products calculated above.

For any loan for which an APR of the same term to maturity or initial, fixed-rate period, as applicable, (collectively, for purposes of this paragraph, “term”) is not included among the 14 products derived or estimated from the PMMS data by the calculations above, the comparable transaction is identified by the following assignment rules: For a loan with a shorter term than the shortest applicable term for which an APR is derived or estimated above, the APR of the shortest term is used. For a loan with a longer term than the longest applicable term for which an APR is derived or estimated above, the APR of the longest term is used. For all other loans, the APR of the applicable term closest to the loan’s term is used; if the loan is exactly halfway between two terms, the shorter of the two is used. For example: For a loan with a term of eight years, the applicable (fixed-rate or variable-rate) seven-year APR is used; with a term of six months, the applicable one-year APR is used; with a term of nine years, the applicable ten-year APR is used; with a term of 11 years, the applicable ten-year APR is used; and with a term of four years, the applicable three-year APR is used. For a fixed-rate loan with a term of 16 years, the 15-year fixed-rate APR is used; and with a term of 35 years, the 30-year fixed-rate APR is used.

The four APRs derived directly from PMMS product data, the ten additional APRs estimated from PMMS data in the manner described above, and the APRs determined by the foregoing assignment rules are the average prime offer rates for their respective comparable transactions. The PMMS data needed for the above calculations generally are available on the Freddie Mac website ( http://www.freddiemac.com/dlink/html/PMMS/display/PMMSOutputYr.jsp) on Thursday of each week. APRs representing average prime offer rates for the 14 products derived or estimated as above are posted in tables on the FFIEC web site the following day. Those average prime offer rates are effective beginning the following Monday and until the next posting takes effect.

Numerical Example:

The week of May 19 through 25, 2008 is used to illustrate the average prime offer rate calculation Methodology. On Thursday May 15, Freddie Mac released the following PMMS information reflecting national mortgage rate averages for the three day period May 12 through May 14 (each variable is expressed in percentage points):

30-year fixed-rate:
Contract rate 6.01
Fees & Points 0.6
15-year fixed-rate:
Contract rate 5.60
Fees & Points 0.5
Five-year variable-rate:
Initial rate 5.57
Fees & Points 0.6
Margin 2.75
One-year variable-rate:
Initial rate 5.18
Fees & Points 0.7
Margin 2.75

The Freddie Mac survey contract rate and points for the 30-year and 15-year fixed-rate mortgages are used to compute APRs for these two products:

30-year fixed-rate 6.07
15-year fixed-rate 5.68

As a preliminary step in calculating APRs for the one-year and five-year variable-rate products, average close-of-business Treasury yields for the three days in which the survey was conducted are calculated (the three yields summed before dividing by three are the close-of-business yields reported for May 12th, 13th, and 14th):


One-year Treasury (2.01+2.08+2.11)/3=2.07
Two-year Treasury (2.30+2.47+2.53)/3=2.43
Three-year Treasury (2.54+2.70+2.78)/3=2.67
Five-year Treasury (3.00+3.17+3.22)/3=3.13
Seven-year Treasury (3.34+3.49+3.50)/3=3.44
Ten-year Treasury (3.78+3.90+3.92)/3=3.87

The fully-indexed rate for the one-year variable-rate mortgage is calculated as the one-year Treasury yield plus the margin: 2.07+2.75=4.82 Because both variable-rate products in the PMMS data use the same margin, the fully-indexed rate for the five-year variable-rate mortgage is the same number: 2.07+2.75=4.82 (since each adjusts to the 1-year treasury).

The initial rate, points, and fully-indexed rate are used to compute APRs for the one-year and five-year variable-rate products:

One-year variable-rate 4.91
Five-year variable-rate 5.16

Data for the interpolated two-year and three-year variable-rate mortgages are calculated as weighted averages of the figures for the one- and five-year variable-rates, which are used in conjunction with the yields on the two- and three-year Treasuries as follows:

Two-year variable-rate:
Initial rate [3x(5.18-2.07)+1x(5.57-3.13)]/4+2.43=5.37
Fees & Points [3x.7+1x.6]/4=.7
Margin [3x2.75+1x2.75]/4=2.75
Fully-indexed rate 2.07+2.75=4.82
Three-year variable-rate:
Initial rate [2x(5.18-2.07)+2x(5.57-3.13)]/4+2.67=5.45
Fees & Points [2x.7+2x.6]/4=.7
Margin [2x2.75+2x2.75]/4=2.75
Fully-indexed rate 2.07+2.75=4.82

The foregoing initial rates, points, margins, and fully-indexed rates are used to calculate APRs for the two- and three-year variable-rate products:

Two-year variable-rate 4.97
Three-year variable-rate 5.03

Data for the seven-year and ten-year variable-rate products are estimated using the survey data for the five-year variable-rate product and yields on the seven- and ten-year Treasuries:

Seven-year variable-rate:
Initial rate (5.57-3.13)+3.44=5.88
Fees & Points =.6
Margin =2.75
Fully-indexed rate 2.07+2.75=4.82
Ten-year variable-rate:
Initial rate (5.57-3.13)+3.87=6.31
Fees & Points =.6
Margin =2.75
Fully-indexed rate 2.07+2.75=4.82

The foregoing initial rates, points, margins, and fully-indexed rates are used to calculate APRs for the seven- and ten-year variable-rate products:

Seven-year variable-rate 5.40
Ten-year variable-rate 5.85

The initial rate and points of the variable-rate mortgages calculated above are used to estimate APRs for fixed-rate products with terms to maturity of ten years or less:

One-year fixed:
Initial rate 5.18
Fees & Points .7
APR 6.49
Two-year fixed:
Initial rate 5.37
Fees & Points .7
APR 6.06
Three-year fixed:
Initial rate 5.45
Fees & Points .7
APR 5.92
Five-year fixed:
Initial rate 5.57
Fees & Points .6
APR 5.82
Seven-year fixed:
Initial rate 5.88
Fees & Points .6
APR 6.06
Ten-year fixed:
Initial rate 6.31
Fees & Points .6
APR 6.44

The “30-year” and “15-year” fixed-rate product designations refer to those products’ terms to maturity. The “one-year” and “five-year” variable-rate product designations, on the other hand, refer to those products’ initial, fixed-rate periods. All variable-rate products discussed in this Methodology have 30-year terms to maturity.

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Using the Single Rate Spread Calculator

Step 1

From the NEW FFIEC Rate Spread Calculator page, enter the following information from the loan application documents:

  • Amortization Type
  • Lock-In Date
  • APR
  • Fixed term (loan maturity) or Variable term (initial fixed-rate period)
  • Lien Status

(see 'Data Requirements for the Rate Spread Calculator' for more information on data thresholds)

If the data entered contains errors or does not meet the required file specifications, an error message to the right of the field will notify the user after choosing 'Submit'.  The data must be corrected to calculate a valid rate spread.  

Step 2

Click "Submit" to calculate the rate spread for the loan application data entered.  

Step 3

The rate spread will be calculated and provided on the front page in percentage-point format, four numerical characters and the decimal point or 'NA' if appropriate. The calculated rate spread should be entered on the HMDA LAR, including all leading and trailing zeros. For example, a calculated rate spread of 3.5 percentage points should be entered on the HMDA LAR as 03.50. A rate spread equal to 'NA' should be entered as 'NA', left justified.

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Using the Batch Rate Spread Calculator

Step 1

From the NEW FFIEC Rate Spread Calculator page, choose the "batch rate spread calculator" link from within the main paragraph.

Step 2

Enter the following information from the loan application documents for a maximum of 10 loans at one time:

  • Amortization Type
  • Lock-In Date
  • APR
  • Fixed term (loan maturity) or Variable term (initial fixed-rate period)
  • Lien Status

(see 'Data Requirements for the Rate Spread Calculator' for more information on data thresholds)

If the data entered contains errors or does not meet the required file specifications, an error message below the field will notify the user after clicking the "Submit" button.

Step 3

Click "Submit" to calculate the rate spread for the loan application data entered.

The rate spread will not be calculated for data containing errors in formatting or data that do not meet the file specifications. The data must be corrected and the user must "Submit" the data again to receive a valid rate spread.

Step 4

The rate spread will be calculated and provided in the Rate Spread box following Lien Status. The rate spread will be provided in percentage-point format, four numerical characters and the decimal point or 'NA' if appropriate. The calculated rate spread for each Record ID should be entered on the HMDA LAR, including all leading and trailing zeros. For example, a calculated rate spread of 3.5 percentage points should be entered on the HMDA LAR as 03.50. A rate spread equal to 'NA' should be entered as 'NA', left justified.

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Contact HMDA Processing Staff

HMDA Reporting Questions

If you have a question regarding the rate spread calculator, HMDA reporting or cannot locate a particular item of interest, please email HMDAHELP@frb.gov

Comments and Suggestions

Your comments and suggestions regarding this website are greatly appreciated.

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