LIBOR Transition Website Notice

The London Interbank Offered Rate (LIBOR), the index used to adjust the interest rate on some adjustable rate mortgages, will be discontinued or become unavailable during the term of the loan. When this happens, we will need to transition to a different index. This notice shares what you need to know amount LIBOR and any potential changes that could impact your loan.


The following information is being provided about a future change that may impact some Adjustable-Rate Mortgages.

What is an Adjustable-Rate Mortgage (ARM):

An ARM features a fixed interest rate for a period of time and then the interest rate adjusts periodically to reflect a new interest rate. The interest rate for ARMs adjusts using an index and a margin.

The index is published by third parties, and is a broad measure or “benchmark” of interest rates. LIBOR is an index used by many mortgage lenders. The margin is an amount added to the index to determine the interest rate on the loan. The original index and the amount the margin were specified in the loan documents signed at loan closing.

What You Need to Know:

  • Due to factors outside our control, the LIBOR index used to determine the interest rate for some ARMs will be discontinued or deemed unsuitable for industry use at or near the end of 2021. As described in your loan documents, when LIBOR is no longer available, an alternative published index to replace LIBOR will be selected for your ARM, consistent with the terms of your ARM. Additionally, in some cases the margin maybe adjusted as well.
  • The replacement of LIBOR will not change other terms of your ARM, such as the maximum interest rate you may pay during the term of the ARM or the timing of any interest rate adjustments.
  • We will notify you when the replacement index takes effect and about any changes this may have to your margin and your payment.

How Did BankNewport Choose the Replacement Index:

In 2014, in response to recommendations and objectives set forth by the Financial Stability Board and the Financial Stability Oversight Council to address risks related to LIBOR, The Federal Reserve Board and the NewYork Fed jointly convened the Alternative Reference Rates Committee (ARRC). One of the ARRC’s objectives was to identify risk free alternatives reference rates for LIBOR. The ARRC has identified the Secured Overnight Financing Rate (SOFR) as the rate that represents best practice for use in certain new USD derivatives and other financial contracts. As a result BankNewport will utilize the SOFR rate as the new index rate for ARMs that are currently using LIBOR as the index.

What You Need to Do:

  • No action is needed on your part.
  • You may refer to your account statement for the current interest rate on your ARM.

We're Here for You: Your mortgage is a substantial investment. We want to help you understand the terms of your ARM and any changes related to the index replacement. If you have concerns about your ARM and the possible index change please feel free to contact us at 401.845.2265.

For general information on adjustable-rate mortgages, see the Consumer Handbook on Adjustable-Rate Mortgages which is maintained by the Consumer Financial Protection Bureau and is available at:

For more information on the discontinuation of LIBOR, see the Alternative Reference Rates Committee website, which is maintained by the Federal Reserve Bank of New York and is available at: