Borrowers on adjustable-rate mortgages that are tied to the 11th District Cost of Funds Index got an unexpected surprise last month.
As of September 2016,
COFI — which is utilized to determine rate changes on a small share of ARMs — came in at 0.601 percent.
The index wound up shattering the 0.643 percent record low established in July 2015 based on historical data
going back to July 1981.
The latest index was reported Monday by the
Federal Home Loan Bank of San Francisco. The FHLB determines the index based on the interest expense from deposit accounts and other borrowings of FHLB-member banks with headquarters in Arizona, California and Nevada.
In August 2016,
COFI was 0.703 percent, while it landed at 0.651 percent in September 2015.
The most-recent calculation was made based on
$15.4 billion in average total funds — sinking from $19.3 billion in August.
A far more common ARM index is the yield on the one-year Treasury note,
which slipped to 0.59 percent at the end of September form 0.61 percent a month earlier, according to data from the Department of the Treasury.
The one-year yield closed out October at
0.66 percent.
ARM share was
7.2 percent in the U.S. Mortgage Market Index report from OpenClose and Mortgage Daily for the week ended Oct. 28.
