# Completely aware that we're not all financial experts-a mortgage question, please **URL:** \ **Category:** In My Humble Opinion\ **Created:** [September 26, 2013, 3:46pm UTC](https://boards.straightdope.com/t/completely-aware-that-were-not-all-financial-experts-a-mortgage-question-please/669730 "2013-09-26T15:46:41Z")\ **Posts on this page:** 1\ **Page:** 2
**Author:** ![deltasigma](https://avatars.discourse-cdn.com/v4/letter/d/e5b9ba/32.png) [@deltasigma](https://boards.straightdope.com/u/deltasigma)\ **Post date:** [September 27, 2013, 6:40pm UTC](https://boards.straightdope.com/t/completely-aware-that-were-not-all-financial-experts-a-mortgage-question-please/669730/21 "2013-09-27T18:40:20Z")
> [@jacobsta811](#): > > ARM rates on an existing loan are based on a fixed percentage over some index. We’d have to know which one, but those can move a lot less than the rates you see on CNBC for new loans. If it is based on the prime rate, that last moved in 2008 ([United States Prime Rate History](http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm)). Others like LIBOR ([http://www.fedprimerate.com/libor/libor\_rates\_history.htm#liborpreviousmonth](http://www.fedprimerate.com/libor/libor_rates_history.htm#liborpreviousmonth)) or the CMT move more, but that calculation is assuming rates up .50%/yr and it never goes down. Dude. I don’t know what benchmarks ARMs are based on these days, but I doubt they’re going to use a rate that hasn’t changed in 6 fucking years. We used to use Libor and that was set either daily or weekly I think - whatever the practice was back in the 80’s. Beyond that, what you pointed me to is based on the fed funds rate which is only for emergency borrowing. And by the way, there are 2 fed funds rates - what the fed charges and what banks charge each other. The first one doesn’t reflect market conditions - at least not in real time. So I don’t know if you really understand any of this, but I’m starting to think not. [Previous page](https://boards.straightdope.com/t/completely-aware-that-were-not-all-financial-experts-a-mortgage-question-please/669730.md?page=1)