Mortgages Analyzed
Cost of Funds Index (COFI)

Current COFI Rates

Jun Value Change Last 52 week
2018     Month High Low


0.934   0.049 0.885 0.934 0.707
Source: FHLBank San Francisco

52 Weeks COFI Trend


COFI Rates

For the Year:  

What is Cost of Funds Index?

COFI Rates

Cost of Funds Index (COFI) is the weighted average interest expense paid by reporting financial institutions on their borrowings. COFI stands for the 11th District Monthly Weighted Average Cost of Funds Index. It is calculated and published by the Federal Home Loan Bank of San Francisco (FHLB-SF) and is available on its website at Cost of Funds Indices page.

COFI values are published on a monthly basis on the last business day of each month for the previous month’s value. For example, COFI for January will be published on the last business day of February. The first COFI value was published on August 28, 1981, for the month of July 1981.

Other Names for COFI

  • 11th District cost of funds index
  • 11th District COFI
  • Cost of Funds Index
  • 11th District Monthly Weighted Average Cost of Funds Index

Historical COFI Rates


Use of COFI in Mortgages

COFI is used as an index to adjust interest rate on adjustable rate mortgages. Since COFI is a monthly index, it is used to change interest rate on ARMs that adjust monthly.

COFI tends to be more stable than other mortgage indexes. COFI is desirable when interest rates are rising or when they are volatile. Use of COFI as an index may not be beneficial to the borrower when the interest rates are declining over the long term. In this case, COFI will lag the market and the borrower may end up paying a higher interest compared to a non-COFI indexed ARMs.


How is Cost of Fund Index Calculated?

COFI is calculated from the actual interest expense reported for a given month by reporting financial institutions on their borrowings.

COFI  =  
Total interest expenses Total Funds

Interest expenses include the total amount of interest expense reported for the month on all deposit accounts, FHLB advances, and other borrowings.

The interest expense is adjusted for the number of days in a month by multiplying it by an adjustment factor. The adjustment factors are:

  365-day year 366-day year
February 1.086 1.052
30-day months 1.014 1.017
31-day months 0.981 0.984


Total funds include deposit accounts, FHLB advances, and other borrowings. The total funds are calculated by averaging the month-end balances for that month and the prior month. For example, if the balance for deposit accounts on July 31 is $24 billion and $26 billion on 31st Aug, then the average deposit account balance for Aug is $25 billion.

The result of the division of the interest expenses by the total funds is annualized by multiplying by 12. This result is rounded to the third decimal place to derive the value for COFI for that month.

Reporting financial institutions include savings institutions headquartered in Arizona, California, and Nevada that satisfy the FHLB-SF’s criteria for inclusion in COFI (COFI Reporting Members).

Example of COFI Calculation

FHLB-SF published the following values for the month of October 2016

  Oct 2016
Average total funds $15.5 billion
Average deposit accounts $14.6 billion
Average advances $897.3 million
Average other borrowings $37.3 million
Total interest expenses   $7.7 million
COFI for Oct 2016 0.598%

In other words

COFI for Oct 2016 =  
0.0077 (14.6 + 0.8973 + 0.0373)
× 12 = 0.598%

Updated: Jul 31, 2018


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