👉 The Cox IOR, or Index of Collateralization Ratio, is a financial metric used primarily in mortgage lending to assess the level of security a borrower provides beyond their own collateral. It is calculated by dividing the value of the collateral by the total amount of debt the borrower owes, including both primary and secondary (or additional) security. A Cox IOR of 100% indicates that the collateral fully covers the debt, leaving no room for default. Typically, a higher Cox IOR suggests lower risk for the lender, as it implies a larger buffer against potential losses if the borrower defaults. Commonly, lenders prefer Cox IORs above 70%, though this can vary based on market conditions and the type of loan.
