"SOFR Surge and Fed Moves Spark Year-End Funding Rate Volatility"

The Secured Overnight Financing Rate (SOFR) is an interest rate used by financial institutions for overnight borrowing, backed by U.S. Treasury securities, and serves as a benchmark for various financial instruments, including adjustable-rate mortgages (ARMs). SOFR has replaced LIBOR due to its reliance on actual transaction data, making it less susceptible to manipulation. For homeowners, SOFR affects the rates of ARMs during the adjustment period, but not fixed-rate mortgages. It's important for borrowers to understand how SOFR may influence their mortgage rates and to be aware of the terms in their loan contracts.