Interest rates change so often because of the many

and varied number of products on which rates

are based and by which rates are determined.

• Prime rate: The rate offered to a bank's best customers.

Treasury bill rates: Treasury bills are short-term debt instruments used by the U.S. Government to finance their debt. Commonly called T-bills they come in denominations of 3 months, 6 months and 1 year. Each treasury bill has a corresponding interest rate (i.e. 3-month T-bill rate, 1-year T-bill rate).

Treasury Notes: Intermediate-term debt instruments used by the U.S. Government to finance their debt. They come in denominations of 2 years, 5 years and 10 years.

Treasury Bonds: Long-debt instruments used by the U.S. Government to finance its debt. Treasury bonds come in 30-year denominations.

Federal Funds Rate: Rates banks charge each other for overnight loans.

Federal Discount Rate: Rate New York Fed charges to member banks.

Libor: London Interbank Offered Rates. Average London Eurodollar rates.

6 month CD rate: The average rate that you get when you invest in a 6-month CD.

11th District Cost of Funds: Rate determined by averaging a composite of other rates.

Fannie Mae-Backed Security rates: Fannie Mae pools large quantities of mortgages, creates securities with them, and sells them as Fannie Mae-backed securities. The rates on these   securities influence mortgage rates very strongly.

• Ginnie Mae-Backed Security rates: Ginnie Mae pools large quantities of mortgages, secures   them and sells them as Ginnie Mae-backed securities. The rates on these securities influence mortgage rates on FHA and VA loans

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