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What the 12-MTA and COFI indices are -
and why they matter

Consumers like the COFI/MTA because they do not move up or down as rapidly as market interest rates - such as the prime rate, the discount rate, or Treasury bill rates.

The 12-Month Treasury Average Index (12-MTA) is based on average annual yields on U.S. Treasury Securities adjusted to a constant maturity of one year, as made available by the Federal Reserve. The 12-month average is determined by adding together the annual yields for the most recently available 12 months and divided by 12.

The 11th District Cost of Funds Index (COFI) is based on the interest paid on savings deposits and other borrowings by the savings institutions in the Federal Home Loan Bank's 11th District. COFI reflects the rates these institutions have paid in order to obtain funds to lend.

The 12-MTA and COFI indices do not move up or down as rapidly as market interest rates. Historically, 12-MTA and COFI based loans exhibited sharp rate increases. That means you can enjoy the stability of your 12-MTA or COFI ARM, compared to other interest indices that generally drop or rise more rapidly.

A mortgage that puts you in control of your monthly payments. Each month, an easy-to-read loan statement lets you choose the payment amount that best suits your financial situation. Pay the minimum amount to free up funds for other uses, or make larger payments for faster equity build-up. It's ideal if your income fluxgates or steadily increases over the years.

Historical Performance of the six most popular ARM indexes over the last ten years.

15/30 Year Conventional LoansC.O.S.I./C.O.F.I./C.O.D.I. LoansFHA/VA LoansBad Credit (Subprime)RefinancingHome Equity Loans
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