Data Requirements for the Rate Spread Calculator

The calculator requires several components to successfully generate a rate spread for HMDA reporting. The required data include the action taken type, reverse mortgage code, amortization type, rate-set date, annual percentage rate, and loan term.

Action Taken Type

Select Action Taken code 1, 2 or 8. Under the 2015 HMDA Final Rule, rate spread is reported only on originated loans, applications that were approved but not accepted and preapproval requests that were approved but not accepted. If Action Taken equals 3, 4, 5, 6, or 7, report Rate Spread as NA.

Reverse Mortgage Code

Under the 2015 HMDA Final Rule, rate spread is not applicable for reverse mortgages. Therefore, the rate spread calculator specifies that Reverse Mortgage equals 2. If Reverse Mortgage equals 1, report Rate Spread as NA.

Amortization Type

Select an amortization type. Based on this selection, the calculator logic will determine whether the fixed or adjustable table should be referenced to perform the calculation.

Rate-set Date

Financial institutions are required to compare the APR for the covered loan or application disclosed on the applicable Regulation Z disclosure with the corresponding ‘rate’ from the applicable ‘Average Prime Offer Rates” table. All loans locking from Monday through the following Sunday would use the APOR posted on the previous Thursday. For consistency’s sake, financial institutions may not apply new benchmarks before the Monday following publication, even if their systems are capable of applying the new benchmarks earlier.

Enter the rate-set date in mm/dd/yyyy format. Dates entered must be between January 2nd, 2017 and the current date.

To calculate rate spread on loans with an action taken date prior to January 1st, 2018 use the prior rate spread calculator.

If an interest rate is set pursuant to a "lock-in" agreement between the financial institution and the borrower, then the date on which the agreement fixes the interest rate is the date the rate was set. If a rate is re-set after a lock-in agreement is executed (for example, because the borrower exercises a float-down option or the agreement expires), then the relevant date is the date the financial institution exercises discretion in setting the rate for the final time before final action is taken. If no lock-in agreement is executed, then the relevant date is the date on which the financial institution sets the rate for the final time before final action is taken.

Annual Percentage Rate (APR)

Enter the APR in percentage format. Data entered should be in the range 0 to 99.999%. For example, an APR of 4.875% should be entered 4.875. If the figure is more than three decimal places, users may round the figure or truncate the digits beyond three decimal places. If the figure is less than three decimal places, trailing zeros may be included or truncated. Do not include any leading zeros.

Loan Term: Fixed rate (loan maturity) or Variable rate (initial fixed-rate period)

Enter the loan term in years between 1 and 50. The loan term is defined differently depending on whether the loan is fixed- or variable- rate. For a fixed-rate loan, the term is the loan’s maturity, that is, the period until the last payment will be due under the loan contract. For a variable-rate loan, the term is the initial, fixed-rate period, that is, the period until the first schedule rate reset. For example, five years is the relevant term for a variable-rate transaction with a five-year, fixed-rate introductory period that is amortized over thirty years.

When a covered loan’s term to maturity (or, for a variable-rate transaction, the initial fixed-rate period) is not in whole years, the financial institution uses the number of whole years closest to the actual loan term or, if the actual loan term is exactly halfway between two whole years, by using the shorter loan term. There is an exception for a loan term shorter than six months (including variable-rate covered loans with no initial, fixed-rate periods), which should be rounded to 1.

If the amortization period of a loan is longer than the term of the loan because, for example, the loan has a balloon feature, enter the loan term to determine the applicable prime offer rate. For example, in the case of a five-year loan that has a balloon payment because the payments are amortized over 30 years, enter a term of 5.