The Cost of Funds Index maintained by the Eleventh Federal Home Loan District stood at 2.113% in June, down nearly 2 basis points from May's 2.130%.With rates for the 30-year fixed-rate mortgage skyrocketing in recent weeks, the lag factor of the adjustable-rate mortgages indexed to COFI now makes them a more attractive loan product. COFI, which is calculated by the Federal Home Loan Bank of San Francisco, lags because it is a weighted average of the interest paid on the source of mortgage funds for thrifts in Arizona, California, and Nevada. Since much of that comes from deposits, the interest paid is spread out over an extended period. The lag is three to six months behind the movement of other rates.
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