Key Rate Tied to Mortgages Edges Lower

The 11th District cost of funds--the rate to which many adjustable-rate home mortgage loans are tied--was 4.899% in August, down from 4.911% the prior month, the Federal Home Loan Bank of San Francisco reported. The rate, which tends to lag changes in market interest rates, has been ranging between 4.8% and 5% for the last several months. The rate measures the average cost of funds for the thrifts and other financial institutions in the federal bank system’s 11th District, which covers California, Arizona and Nevada.