Index falls as fixed rates hover at record lows
September 3, 2002
By MortgageDaily.com staff
The cost of funds for west coast savings institutions fell, bringing down some mortgage rates with it.
The Federal Home Loan Bank of San Francisco reported the monthly weighted average cost of funds for savings institutions within Arizona, California, and Nevada fell 0.026% -- or 2.6 basis points -- from the prior month to 2.821%. The decline follows three months' of increases for the index, which reflects the actual interest expenses recognized during a given month by all member 11th District savings institutions.
The drop in the cost of funds index -- or COFI as it is widely known -- comes at a time when average fixed mortgage rates are at their lowest point in decades. While COFI programs are popular as fixed rates climb out of a refinance boom, adjustable rate loans are waning amidst the current frenzy of applications.
Mortgage giant Freddie Mac, who surveys mortgage lenders for average rates, reported that the average one-year adjustable-rate mortgage was unchanged last week at 4.34 percent.