What is the 12-MTA?
The 12-Month Treasury Average Index (12-MTA) is based on average annual yields on U.S. Treasury Securities adjusted to a constant maturity of one year, as made available by the Federal Reserve. The 12-month average is determined by adding together the annual yields for the most recently available 12 months and dividing by 12. Stability: The 12-MTA The 12-MTA Index does not move up or down as rapidly as other market interest rates because the 12-MTA is an average of annual yields on U.S. Treasury Securities over a 12-month period. As a result: Higher yields are offset by lower yields on a monthly basis throughout the year It creates an index which is far less volatile than other pure-rate indices Interest rate increases take longer to affect the 12-MTA than other ARM indices Historically, home loans tied to the 12-MTA have not exhibited sharp interest rate increases such as those that occurred in the late 1980s. MTA vs. Other Indices The MTA is a very slow index. The index is nearly as
