The cost of funds index for savings institutions in the Federal Home Loan Bank's 11th District fell to 2.763% in August from 2.821% in July, lowering monthly payments on adjustable-rate mortgages in California, Arizona and Nevada.
The index sets payments through October. The index also is used as a base rate for West Coast mortgages and for bonds backed by those loans. A decrease lowers monthly mortgage payments for homeowners and reduces the interest income on bonds backed by mortgages pegged to the index.
