Quick Definition

The 11th District Cost of Funds Index (COFI) is a monthly weighted average of the interest expenses incurred by financial institutions in the 11th Federal Home Loan Bank District, which is used primarily to determine interest rates on adjustable-rate mortgages.

Examples

• 1A bank uses the COFI rate to adjust the interest rate on an adjustable-rate mortgage.
• 2Financial analysts monitor changes in the COFI to predict trends in mortgage rates.
• 3Homebuyers consider the COFI when choosing between fixed-rate and adjustable-rate mortgages.

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