Margin for adjustable rate mortgages is the difference between the index and the interest rate charged for a particular loan. The margin is a fixed percentage point that is predetermined by the lender and added to the index to compute the interest rate. A lender's margin remains fixed for the entire term of the loan. Lenders are required to disclose the index to which a loan is tied, the margin that will be tacked on to the rate, and any rate or payment caps that apply.
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