LIBOR to SOFR Index Transition

ARM Rate Index Transition

There are changes coming for DFCU Financial borrowers who have an Adjustable Rate Mortgage (ARM) that originated before July 2021.

In June of this year, the London Interbank Offered Rate (LIBOR) index that ARM mortgages use as the benchmark for rate changes is going away. This an industry-wide change resulting in the the need to identify a comprable index to replace it. There are millions of consumer mortgage loans currently using the LIBOR index that will have a similar change.

For DFCU mortgages that will be affected, the new index that will be used for ARM loans with rates updating after May 2023 is the CME Term Secured Overnight Financing Rate (SOFR). The Federal Reserve has identified this as a comparable index for the industry to use.

We realize that members impacted by this change may have questions, so below are some FAQ, along with links to additional information from the government agencies guiding the change. 

DFCU understands this can be a confusing topic and, as always, we're here to answer any questions you may have. Feel free to contact our Mortgage Servicing department at 800-739-2770, option 4.

Additional information regarding the index transition can be found on the following sites provided by the CFPB and the New York Fed.


LIBOR stands for London Interbank Offered Rate, and is a commonly used index for Adjustable Rate Mortgages in the United States. The rise or decline of your index will impact your rate at time of adjustment.
The Alternative Reference Rates Committee has identified the replacement index to be the CME Term SOFR Rate.
All loans using LIBOR as an index will convert in June, 2023.
No, DFCU Financial will make the appropriate adjustments.
For any ARM loan, the interest rate (and payment) can increase or decrease whenever you have a scheduled interest rate adjustment. Your adjustment schedule will not change.
No, all Adjustable Rate Mortgage loans throughout the industry that utilize the LIBOR index are impacted.