Mortgages Analyzed
 
Average Prime Offer Rate (APOR)

Current APOR Rates

Aug 20, Current Change Previous 52 week
2018 Rate   Rate High Low

 15 Yr FRM

4.08   0.04 4.12 4.21 3.15

 30 Yr FRM

4.57   0.06 4.63 4.69 3.82

  1 Yr ARM

5.04   0.00 5.04 5.06 3.93

  5 Yr ARM

4.74   0.01 4.75 4.75 3.72

 7 Yr ARM

4.62   0.03 4.65 4.65 3.74

10 Yr ARM

4.48   0.02 4.50 4.50 3.76
Source: FFIEC
Source :www.MortgagesAnalyzed.com
 

52 Weeks APOR Trend-Line

Source :www.MortgagesAnalyzed.com

APOR Values

   For the week ending:
(Select Date)
Source :www.MortgagesAnalyzed.com
 

What is Average Prime Offer Rate?

CMT Rates

Average Prime Offer Rate (APOR) is a survey-based estimate of Annual Percentage Rates (APRs) currently offered on prime mortgage loans. The rates are published for Fixed Rate Mortgages (FRM) and Adjustable Rate Mortgages (ARM) and are available for yearly maturities ranging from 1 year to 50 years.

APOR is calculated and published weekly by Federal Financial Institutions Examination Council's (FFIEC) and is available on their website at Average Prime Offer Rates Tables.

APOR is used to calculate Rate Spread for HMDA reporting purposes and to determine whether the loan is a higher priced mortgage loan (HPML) under Regulation Z.

Regulation Z (12 CFR 1026.35(a)(2)), defines APOR as: "Average prime offer rate" means an annual percentage rate that is derived from average interest rates, points, and other loan pricing terms currently offered to consumers by a representative sample of creditors for mortgage transactions that have low-risk pricing characteristics.

 

APOR Rates: Time Series

Source :www.MortgagesAnalyzed.com

How is Average Prime Offer Rate Calculated?

Average Prime Offer Rate is based on average interest rates, fees, and other terms on prime mortgages. Prime mortgages are loans that are to highly qualified borrowers. FFIEC calculates APOR by using the data obtained from multiple sources which includes:

  1. Freddie Mac's Primary Mortgage Market Survey (PMMS). This is the primary source of data for most APOR series.
  2. Freddie Mac Data: From January 1, 2016 Freddie Mac has discontinued publishing the PMMS rates for 1 year ARM product. Even though PMMS data is no longer published, FFIEC obtains data from Freddie Mac using the same survey and calculation techniques as PMMS to construct the APOR for 1 year ARM.
  3. HSH Associates. Used as a source for the 1 year ARM product for a short period of time between July 7, 2016 and September 15, 2016.

Use of Average Prime Offer Rate in Mortgages

Determining Higher Priced Mortgage Loan under Regulation Z (TILA)

A mortgage loan, secured by primary residence, is considered a higher priced mortgage loan (HPML) if the APR of the loan is higher than the APOR by a certain percentage. This is based on the type of the loan as below:

  1. First Lien Mortgages: The loan will be considered an HPML if the APR is 1.5% or more higher than the APOR.
  2. Non-Conforming/Jumbo Loans: The loan will be considered an HPML if the APR is 2.5% or more higher than the APOR.
  3. Subordinate Lien Mortgages: The loan will be considered an HPML if the APR is 3.5% or more higher than the APOR.
Type of Loan Loan is an HPML if
First Lien
Mortgage
APOR – APR 1.5%
Non-Conforming
Loan
APOR – APR 2.5%
Subordinate Lien   
mortgage
APOR – APR 3.5%

HPMLs are subject to additional appraisal and escrow requirements under Regulation Z (12 CFR 1026.35)

Calculating Rate Spread for Regulation C (HMDA)

APOR is used to calculate Rate Spread which is a Home Mortgage Disclosure Act (HMDA) data field. Rate spread is the difference between the APR and APOR based on action taken, amortization type (FRM/ARM), lock-in date, APR, maturity term (use loan maturity for FRM or initial fixed-rate period for ARM), and lien status.

FFIEC has developed a Rate Spread Calculator to calculate rate spread for a single loan and a Batch Rate Spread Calculator to calculate rate spread for multiple loans.

Rate Spread is reported in the HMDA LAR if the rate spread is equal to or greater than 1.5 percentage points for first-lien loans or 3.5 percent­age points for subordinate-lien loans. Also, rate spread is only calculated if the loan is a home-purchase loan, a refinancing, or a dwelling-secured home improvement loan. Refer to HMDA rules for additional details on HMDA reporting requirements for Rate Spread.

External Links

  1. FFIEC, Average Prime Offer Rates Tables
  2. FFIEC Rate Spread Calculator
  3. FFIEC Batch Rate Spread Calculator
  4. FFIEC Old Rate Spread Calculator– use if the loan application date is before October 1, 2009 and the action taken date is before January 1, 2010.
  5. FFIEC Old Bulk Rate Spread Calculator- use if the loan application date is before October 1, 2009 and the action taken date is before January 1, 2010.
  6. CFPB, What is a "higher-priced mortgage loan?"
  7. eCFR, Regulation Z - Requirements for higher-priced mortgage loans (12 CFR 1026.35)

Updated: Aug 20, 2018

Comments

comments powered by Disqus
Rates
Finance
Know all there is to know about the US Mortgage Industry. We help you to make a well informed decision.
Finance
Loan Products
Confused about the choosing right loan product for you? We help you decide the loan product that suits your needs best.
Loan Products
Documents
Here you will find all there is to know about the forms, papers & documents required for Home Loan Mortgage and much more.
Documents