CFPB Announces Revised Method For Determining APOR

The Consumer Financial Protection Bureau (CFPB) on Friday announced a revised version of its “Methodology for Determining Average Prime Offer Rates" (APOR).

The revision describes the calculations used to determine APOR for purposes of federal mortgage rules. 

APORs are annual percentage rates derived from average interest rates, points, and other loan-pricing terms currently offered to consumers by a representative sample of creditors for mortgage loans that have low-risk pricing characteristics, the CFPB said..

The bureau said the methodology statement has been revised to address the upcoming unavailability of certain data the CFPB previously relied on to calculate APORs. On or after April 21, 2023, the CFPB will begin using ICE Mortgage Technology data and the CFPB’s revised methodology to calculate APORs, the bureau said.

According to the revised methodology statement, the calculation of APORs is based on survey data for eight mortgage products:

1. 30-year fixed-rate; 
2. 20-year fixed-rate; 
3. 15-year fixedrate; 
4. 10-year fixed-rate; 
5. 10/6 variable rate; 
6. 7/6 variable rate; 
7. 5/6 variable rate; and
8. 3/6 variable rate.

The survey data includes data for “best quality,” 80% or less loan-to-value ratio, and first-lien loans, the CFPB said. All four variable-rate products adjust to an index based on the 30-day Secured Overnight Financing Rate (SOFR) plus a margin, and adjust every six months after the initial fixed-rate period.

The CFPB will continue to post the survey data used to calculate APORs on the Federal Financial Institutions Examination Council’s website, and will continue to identify the source of the data on that page.