Monthly Treasury Average (MTA) is the twelve month moving average of the monthly values of 1-Year Constant Maturity Treasury (1-Yr CMT) index. 1 Year CMT rate is the interpolated yield of the recently auctioned treasury securities adjusted to a constant maturity of one year. The current and historical monthly values of 1-Yr CMT index is published by the Federal Reserve on their website at H.15 Selected Interest Rate webpage. Different institutions may calculate the index themselves by averaging the monthly 1-Yr CMT rates for the preceding 12 months.
The MTA index is also known as the 12-Month Moving Average Treasury Index (12-MAT or 12MAT)
MTA Index is also known as:
MTA is used as an index for a number of adjustable rate mortgage (ARM) loans. It is most used in Payment Option ARM’s (negative amortization loans). MTA is a 12 month moving average index which smoothens out the movements in interest rates. This makes it an attractive option in the periods of frequent rate movements. It is also ideal when the interest rates are low but are expected to rise since in that case the index will lag the general movements in market interest rates.
Updated: Jul 31, 2019