WASHINGTON — Economists at the Federal Reserve are suggesting an intriguing new alternative to the traditional 30-year fixed mortgage that could be better for consumers, more profitable for banks, and safer for both.

In a paper last month, they proposed a new mortgage product that would allow home buyers to build equity faster than the standard 30-year fixed-rate mortgage with little or no down payment. This mortgage is built around a cost of funds index, or COFI, which the researchers calculated by dividing the total interest expenses of domestic commercial banks by their total interest-bearing liabilities.

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