Compared to COSI, CODI, MTA and LIBOR, the COFI loan rates are the lowest when ARM rates are at a peak, and average low when market rates are on the fall.
Also, COFI loans have almost the lowest margins all the time.
Option ARMs based on COFI may have starting loan rates of 1% for 80% LTV, 2% for 90% LTV, and margins from 1.5% to 4.20%.
COFI loan rates and terms will vary among lenders but on the whole COFI loan rates go up or down very slowly, have very low margins (higher when accommodating no cost loans), and provide great reliability for borrowers when rates are on the rise.
However, even with a COFI based ARM, avoid prepayment penalties. They are difficult to get rid of, and expensive to pay down. When prepayment is not allowed, COFI loan rates will be lower.