International derivatives marketplace CME Group today announced it will expand its interest rate complex with the addition of Mortgage Rate futures in January 2025, pending regulatory review.

“For the first time ever, market participants will have a precise and highly-efficient tool for managing risk across mortgage pipelines, servicing rights and securities,” said Agha Mirza, CME Group Global Head of Rates and OTC Products. “As the fixed income market continues to evolve, our new Mortgage Rate futures will enable clients to trade the primary-secondary mortgage spread and gain unrivaled margin offsets with our U.S. Treasury futures, TBA futures and Eris SOFR swap futures.”

Mortgage Rate futures are cash-settled contracts that provide direct exposure to the latest primary mortgage rate available to borrowers. The contracts are the first-ever to be based on the 30-Year Fixed Rate Conforming Optimal Blue Mortgage Market Index (OBMMI), which is designed for IOSCO compliance and tracks real-time rate lock data from more than one-third of U.S. residential mortgage originations.

Available to trade on CME Globex, Mortgage Rate futures will be listed with, and subject to, the rules of CBOT and cleared by CME Clearing. In addition to margin offsets against U.S. Treasury futures, soon after the launch date, the contracts will be eligible for Portfolio Margining with cleared swaps. CME Clearing currently provides more than $20 billion in daily margin efficiencies between interest rate futures, options, cleared swaps and cash securities.