Key Basis of Adjustable Mortgages Edges Lower

The 11th District cost of funds--the rate to which many adjustable-rate home mortgage loans are tied--slipped to 4.97% in February from 4.99% in January, the Federal Home Loan Bank of San Francisco reported. The rate, which tends to lag changes in market interest rates by several months, has gyrated between 4.7% and 5% for more than a year now. The rate measures the average cost of funds for the thrifts and other financial institutions in the bank’s 11th District, which covers California, Arizona and Nevada.