Secured Overnight Financing Rate (SOFR)
SOFR is an overnight reference rate intended to reflect the general cost of financing U.S. Treasury securities overnight in the repo market. It is computed and published by the using transaction data, including cleared bilateral repo, with methodology intended to reduce distortions from "specials."
- Where it applies
- Federal
- When it comes up
- Origination; rate-setting; hedging (if applicable); servicing
- Property types
- Residential and commercial (as a floating-rate benchmark)
In practice
Operationally, "SOFR + spread" pricing usually requires clarifying which SOFR convention applies (overnight vs term/averaged), the day-count and lookback, and any spread adjustment.
Read more in the Knowledge Base
Related terms
Residential Financing
- Accrual Rate
- Adjustable Rate Mortgage (ARM)
- Amortization
- Application (TRID application)
- Conforming Loan Limit
- Pay Rate
- PMI Automatic Termination
- PMI Cancellation (Borrower-Requested)
- Private Mortgage Insurance (PMI)
- TILA-RESPA Integrated Disclosures (TRID)
General information, not legal, tax or financial advice.