The Monthly Treasury Average (MTA) is an index that is based on a 12 month rolling average of the published Treasury Bill (T-Bill). The index adjusts monthly and has a history exhibiting periods of rapid movement.

The MTA is often used to index ARM loans. As an example, the popular Pay Option Arm (Pick-A-Payment) Loan is very often indexed by the MTA.

MTA is one of the more stable indexes. Since it is a 12 month average, it generally is slower to adjust and adjusts by smaller amounts. It also generally lags the market when interest rates rise or fall.

MTA loans such as the Option Arm are available in two adjustment periods. Monthly and every three months. Typically, the monthly MTA will have a lower index than the three month MTA.

 

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