What Does "Why My SO" Mean
"Why my SO" is a common search phrase asking why a loan or rate is tied to a specific financial index. In finance, SO stands for the Secured Overnight Financing Rate, a key benchmark used to set short-term borrowing costs.
Why SOFR Matters for Loans
Many adjustable-rate mortgages, business loans, and credit lines use SOFR as their reference rate. When SOFR rises or falls, your interest payments can change accordingly. Understanding this connection helps borrowers anticipate payment shifts and compare loan offers more clearly.
How SOFR Is Set
SOFR is calculated daily from transactions in the U.S. Treasury repurchase market, where institutions lend cash overnight using Treasuries as collateral. The rate reflects actual lending activity and is published by the Federal Reserve Bank of New York. For more details, see the official Federal Reserve Bank of New York page on SOFR.
