11th District Cost of Funds (COFI) is an index that is used to determine interest rate changes for certain ARMs (adjustable-rate mortgage).< a href="cofi">cofi reflects the average interest rate paid by the member banks and savings institutions located in Arizona, California and Nevada. This index moves slower to market changes due to the largest part of the index being based on savings accounts. The< a href="cofi">cofi is one of the most popular and considered the most stable of indices.

The source of these funds for< a href="cofi">cofi includes savings and checking accounts, money market accounts, short term CD accounts, advances by the FHLB District Bank, and other borrowed money.

The average cost of funds is said to be weighted because the three kinds of funds and their costs are added together before a ratio is computed rather than calculating averages individually for the three sources and using a simple average of the three ratios. This gives the greatest weight to the interest paid on deposits, and explains the delayed reaction of the index to rising fixed-rate mortgages.