West Coast- and London-based adjustable-rate mortgage indexes headed higher.

The 11th District Cost of Funds Index was 4.382% in September, the Federal Home Loan Bank of San Francisco announced on Tuesday. The figure was higher than 4.277% a month earlier and 2.972% a year prior.

The COFI, which the bank reports about 30 days following the end of each month, has increased 28 months in a row to the highest level since June 2001.

In September, $636.1 billion average total funds were used in the calculation of the COFI, which reflects the actual interest expense reported for a given month by member savings institutions in Arizona, California and Nevada, according to the bank.

The COFI competes for ARM applications, which account for about 26% of all 1003s, the Mortgage Bankers Association said today.

One of COFI's competitors is the 6-month London Interbank Offered Rate, which reversed three consecutive monthly decreases by rising to 5.3898% in October, Fannie Mae reported. The figure was at 5.3704% in September and at 4.4467% in October 2005.

Another ARM index, the 1-year Treasury Bill, was yielding 5.03% as of Monday, according to Federal Reserve data, about 12 BPS higher than one month earlier.