BANKING & FINANCE - Aug. 1, 1992

Cost of Funds Creeps Down: The 11th District cost of funds index, widely used by lenders in California to set adjustable-rate mortgages, fell again in June from May, but at a far slower rate than it has been dropping in the past year. The index, which measures the cost of mortgage money for thrifts in California, Nevada and Arizona, edged down to 5.258 in June from 5.290 in May, according to the Federal Home Loan Bank of San Francisco. Lenders typically set rates at 2 to 2.5 percentage points above the index. On a hypothetical $200,000 loan, the most recent drop translates to about $5 a month in savings on mortgage payments. The rate has been dropping the past year as overall interest rates have declined.