Key Mortgage Rate Climbs to 8-Year High

The 11th District cost of funds--the rate to which many adjustable-rate home mortgage loans are tied--rose to 5.196% in May from 5.078% in April, the Federal Home Loan Bank of San Francisco reported. The rate, which tends to lag changes in market interest rates by several months, has been climbing steadily in recent months and in May stood at its highest level since June 1992, when it was 5.258%. The rate, which stood at 4.480% in May 1999, measures the average cost of funds for savings institutions in the bank’s 11th District, which includes California, Arizona and Nevada.

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