Cost of Funds Index

The 11th District Cost of Funds Index (COFI) fell below 5% for the first time ever to 4.874% in August, according to figures released Wednesday by the Federal Home Loan Bank of San Francisco. The figure is one of the most popular indexes used by California lenders in setting adjustable-rate mortgage payments.

The index measures what thrifts in California, Arizona and Nevada pay for funds collected from deposits and other mortgage money. It has set record lows monthly since 1991, following the downward trend in overall interest rates. July’s figure was 5.069%.

Adjustable-rate loans pegged to the index typically are set from 2 to 2.5 percentage points above the rate. The August decline would translate to savings of about $27 a month for a homeowner with a hypothetical $200,000 loan.

August: 4.874%

Source: Federal Home Loan Bank of San Francisco