You are correct in that you are to use the maturity that is closest to the maturity of the loan, however at a workshop I attended, sponsered by the Indaiana Bankers Association and conducted by the Pegasus Educationanl Services, we were instructed that if it was exactly in the middle that you used the lower term, not the lower rate, i.e. if you have a 15 year term on the loan you would use the 10 yr treasury rate, not the 20 year.
Last edited by dpersfull; 09/27/02 02:03 PM.
Also if the 15th falls on a weekend or a holiday you use the first business day immediately preceding the 15th as that was the rate in effect on the 15th.
In Suewannee's example, she would use the 3 year treasury rate.
The opinions expressed are mine and they are not to be taken as legal advice.