To obtain the Fully-Indexed Rate, which two numbers must be added together?

The Fully-Indexed Rate is determined by the combination of the index and the margin. The index represents a benchmark interest rate that fluctuates based on broader market conditions, whereas the margin is a fixed percentage added to the index by the lender to determine the interest rate for a particular loan.

By adding the margin to the index, you derive the Fully-Indexed Rate, which reflects the total interest that a borrower will pay on an adjustable-rate mortgage (ARM) at the current time based on those two components. This rate is crucial for borrowers to understand because it ultimately affects their monthly payments and the overall cost of borrowing.

The other combinations of numbers do not pertain to the calculation of the Fully-Indexed Rate, as they involve unrelated factors such as loan amounts and purchase prices.