What is the sum of the published index plus the margin referred to as?

The sum of the published index plus the margin is referred to as the Fully Indexed Rate. This term is crucial in the context of adjustable-rate mortgages (ARMs), which typically have a variable interest rate that can change over time based on fluctuations in an underlying index.

The published index represents a benchmark interest rate, such as the LIBOR, COFI, or another index that reflects market conditions. The margin is a fixed percentage added to the index to determine the overall interest rate charged to the borrower. Together, the published index and margin create the Fully Indexed Rate, which is the rate at which the lender will charge interest when adjustments are made after an initial fixed-rate period.

In practical terms, understanding the Fully Indexed Rate helps borrowers anticipate changes in their monthly payments, as it is a key factor in determining how much they will ultimately pay over the life of the loan.