|COFI Heads Further North
Index remains historically low
By MortgageDaily.com staff
August 1, 2002
The COFI index continued to rise, potentially increasing the rate on variable rate mortgage loans tied to the popular index. The index reflects the cost of funds for financial institutions located in the West.
About 30 days after the end of each month, the Federal Home Loan Bank of San Francisco (FHLB) announces the index. The COFI, which is an acronym for Cost of Funds Index, was reported at 2.847% for June, up 0.075% -- or seven and a half basis points -- from the prior month.
This is the third monthly increase for the index, which had previously fallen every month since January 2001. In March, the COFI fell to 2.653% -- its lowest point in decades.
The COFI is used as an index for many adjustable rate mortgages (ARM's). Other popular ARM indices include the Federal Cost of Funds Index, the National Contract Interest Rate and the one-year Treasury bill.
Freddie Mac reported today that the one-year ARM rate averaged 4.45% percent this week, up from 4.31% the prior week.