A COSI mortgage is an adjustable rate mortgage indexed to the Cost-Of-Savings Index (COSI). As of recently, the Cost of Savings Index is referred to as W-COSI, or Wachovia COSI.
The COSI index lags behind with a month, and is considered more stable than other ARM indexes such as LIBOR, COFI, MTA or CODI. However, even if the COSI index has traditionally lower values than COFI and is higher than CODI and MTA, the difference in the effective mortgage rate will be offset by the lender's margin.
Commonly, you are generally not going for a COSI mortgage because of the index itself. Rather, the COSI mortgage loans are a top choice when rates are climbing, but not a very good choice if rates are going down.