What Is the 11th District Cost of Funds Index?

The 11th District Cost of Funds Index (COFI) was a monthly index that reflected the average interest rate paid by savings institutions in Arizona, California, and Nevada on checking and savings accounts. It was one of many indices used by mortgage lenders to adjust the interest rate on adjustable rate mortgages (ARM) and was launched in 1981. With ꦍan ARM mortgage, the interest rate on a mortgage moves up and down along with some standard interest rate chosen by the lender, and COFI was one of the most popular indices in the western states.

Published on the last day of each month, the COFI represented the 澳洲幸运5官方开奖结果体彩网:cost of funds for Western savings institutions that were members of 澳洲幸运5官方开奖结果体彩网:Federal Home Loan Bank of San Francisco, a self-regulatory agency, and satisfied the Bank's criteria for inclusion in the index. The Federal Home Loan Bank of San Francisco stopped publishing the COFI on Jan. 31, 2022. The Federal Home Loan Mortgage Corporation (澳洲幸运5官方开奖结果体彩网:Freddie Mac) created a replacement index called the Enterprise 11th District COFI Replacement Ind🌺ex. 

Understanding the 11th District COFI

The 11th District Cost of Funds Index (COFI) was computed using several different factors, with interest paid on savings accounts comprising the largest weighting in the average. As a result, the index tended to have low volatility and follow market interest rate changes somewhat slowly; it was generally regarded as a two-month lagging indicator of market interest rates. The interest rate on a mortgage would not match the COFI, rather the ARM rate that was typically 2% to 3% higher than COFI, depending on the borrower's credit history, the size and terms of the loan, the ability of the borrower to negotiate with the bank, and many other factors.

Because was computed using datℱa from three western states, the COFI was primarily used in the western U.S., while the 1-year Treasury index was the measure of choice in the eastern region.