Adjustable-Rate Mortgage Index Change
An ARM has a fixed interest rate for a period of time, and then the interest rate adjusts periodically to reflect a new interest rate and payment. The interest rate for an ARM adjusts using an index and a margin. The index originally used to calculate some ARM interest rates is the London Interbank Offered Rate (LIBOR), which will be discontinued after June 30, 2023, as a result of an industry transition away from LIBOR. At such time, regulated financial institutions like Synovus will no longer be able use this index. According to the terms in your loan and the LIBOR Act, we will replace LIBOR with the 12-month term Secured Overnight Financing Rate (SOFR) published by Refinitiv.
Frequently asked questions and answers:
- How will I know if/when the index for my ARM mortgage changes?
We have mailed letters to all clients with ARMs affected by the index change, and we will send you a reminder notification when the replacement index takes effect. This notification will include any changes to your payments. - What do I need to do when the index changes?
You do not need to do anything to effect this change. - What do I need to know about the replacement index, SOFR?
The 12-month term Secured Overnight Financing Rate (SOFR) is published by Refinitive and is designed specifically for use in this index transition. Learn more about Refinitiv here. - Are other terms of my ARM changing?
No, no other terms of your ARM will be affected by the index change. - How do you have the ability to change the index on my behalf?
The mortgage note you signed at closing allows Synovus to select a new index. An example of how that reads: “If the index is no longer available, the Note Holder will choose a new index that is based upon comparable information. The Note Holder will give me notice of this choice.”
Mortgage notes such as these are subject to safe harbor provisions under the U.S. Adjustable Interest Rate (LIBOR) Act to the extent that they use the Board-selected benchmark replacement for consumer loans as the benchmark replacement, which is the term SOFR rate published by Refinitiv Limited. - Where can I find a copy of my note that references your ability to change the index?
Call Mortgage Customer Service at 1-800-803-0803.
If you have questions, please contact customer service at 1-800-803-0803.
Important disclosure information
- There may be changes to the LIBOR transition timeframe set forth above and, as a result, the information presented herein is subject to change without additional notice. Back