The Eleventh Federal Home Loan District Cost of Funds Index for April is at its third lowest point ever, and the lowest since the recalculation caused by the removal of Wachovia Mortgage FSB in November 2009.
April's index is 1.359%, a decline of nearly 10 basis points from March's 1.452%. The all-time low for COFI is 1.259% in October 2009.
COFI is a weighted average calculation of what it costs Federal Home Loan Bank of San Francisco eligible members to originate mortgages. It is used as an index to price some adjustable-rate mortgages because it tends to lag other rate movements by three-to-six months.
In comparison, the monthly average commitment rate for the one-year ARM according to Freddie Mac's Primary Mortgage Market Survey has been trending at record lows for five of the past seven months, including April's 3.20%.
The monthly average commitment rate for the 30-year fixed-rate mortgage hit its record low in October 2010 at 4.23%. It then reached 4.95% for February before falling 4.84% for both March and April.
For the FHLB-SF's April calculation of COFI, 19 members reported data. Total average funds for the month were $35.7 billion and total interest expense was $40.4 million. In March, those figures were $35.5 billion and $40.0 million respectively.
