What is the Monthly Treasury Average?

Prospective home buyers — especially first-timers — have a lot of learning in front of them.

The world of real estate and home ownership are filled with complicated and complex terms, names, concepts and general jargon you’re never going to hear anywhere else.

One of these names is the Monthly Treasury Average, or MTA as it’s called for short.

Definition of the Monthly Treasury Average

The MTA is one of several indexes to which banks, credit unions and other lending institutions attach their interest rates. When the Monthly Treasury Index goes up or down, lenders pay close attention and use the rise or fall to determine the interest rates they charge you.

Why the MTA matters

If you’re buying a home you are probably doing it with the help of a mortgage (unless, of course, you have $500,000 in cash sitting aside for a rainy day).

When you get a mortgage, the bank, credit union or other financial institution loans you the money you need to purchase your home. The lender then charges you interest on your loan.

If you get a fixed-rate loan, the interest rate charged on your loan will, in many cases, stay the same for the life of your loan. If you get an adjustable-rate mortgage, or ARM, the interest rate on your mortgage will go up or down according to whichever interest rate index your bank uses to determine interest rate amounts.

One of these interest rate indexes is Monthly Treasury Average. The MTA is the average value, calculated over a 12-month period, of the constant maturity treasury (CMT).

Save for Your Future

To learn more about the Monthly Treasury Average (MTA), the constant maturity treasury, and any other mortgage-related term, be sure to speak to a financial professional. He or she can explain these names and terms in greater detail, and perhaps give you ideas on how to profit from them. Many people prefer one index rate, such as the Monthly Treasury Average, over the other available interest rate indexes.


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