COFI vs SOFR ARM 2027 Comparison Calculator
Compare 5/1 ARM payments under COFI vs SOFR index 2027 — see which adjustable-rate index produces lower payment after reset.
COFI Index
Cost of Funds Index — weighted average of interest paid on deposits by 11th District lenders. Lags market by 3-6 months. Slower-moving than SOFR. Last published monthly by Federal Home Loan Bank of San Francisco.
SOFR Index
Secured Overnight Financing Rate — published by NY Fed. Replaced LIBOR June 2023. Most modern ARMs use 30-day average SOFR. Faster-moving but transparent.
How Margin Works
ARM rate = Index + Margin. Margin is fixed for life of loan (typically 2.25-3%). Lender picks margin at origination. The lower the margin, the more competitive the loan.
Rate Cap Limits
All conforming ARMs cap initial adjustment (typ 2-5%) AND lifetime cap (typ 5% above start). Even if index spikes, your rate cannot exceed caps. Always verify on Loan Estimate.
Source: freddiemac.com (Primary Mortgage Survey), cfpb.gov ARM Disclosure. Last updated: May 2026.
Frequently Asked Questions
Which index is cheaper for borrowers?
Depends on when the rate adjusts. SOFR responds faster to Fed rate cuts (saves money in a falling-rate environment). COFI saves money when rates spike (lag protects you).
Are new ARMs still using COFI?
Rarely. SOFR is the modern standard since LIBOR ended. COFI ARMs are still serviced but new originations have shifted to SOFR or Treasury index.
Can I switch indexes mid-loan?
No. The index is part of your note. To change, you must refinance into a new loan with a new index choice.