Not to be confused with the 1 Year T-Bill Index (which is actually a Constant Maturity Treasury Index) , the T-Bill Indexes, particularly the 6 month Treasury Bill Index, are calculated weekly by measuring the results of US Government auctions of 4 week, 13 week and 26 week Treasury Bills (which are also called 1 month / 28 day, 3 month / 91 day, or 6 month / 182 day T-bills)

The most commonly used T-Bill Index for ARM mortgages is the Weekly 6 Month T-Bill (Auction High) Mortgage ARM Index, which is the discount rate for the 26 week Treasury Bill bought at the most recent US Government Treasury Bill auction the previous week. The 6 month T-Bill Index is used as an ARM index mostly in adjustable rate mortgages whose rates adjust every six months.

Like the CMT Indexes, the T-Bill Index moves very rapidly with market volatility, and can be a risky proposition in markets with rising rates such as today’s market. Borrowers with T-Bill Index ARM loans are increasingly seeking the safe harbor of fixed rate mortgages, which are available at rates very comparable to the rates on T-Bill Index ARM loans.