Borrowers in adjustable-rate mortgages that move with the cost of funds index are in for a pleasant surprise.
COFI fell to 1.614% in February from 1.786% the prior month, according to data released today by the Federal Home Loan Bank of San Francisco.
The index was 2.003% the prior year.
COFI reflects the interest expenses of FHLB-member institutions based in Arizona, California and Nevada. For February’s calculation, $37.9 billion in average total funds were used.
The index is used to determine how adjustable-rate mortgages will change.
Another ARM index, the yield on the one-year Treasury bill, finished February at 0.32%, edging up from 0.30% at the end of January. But the one-year yield has since jumped — closing today at 0.41%.
ARMs accounted for 5.2% of activity in the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ended March 26.
