The Cost of Savings Index, or COSI, is a Wells Fargo benchmark used to set the interest rate on certain adjustable-rate mortgages. It equals the weighted average of the interest rates the bank pays on certificates of deposit held by individual depositors at its depository subsidiaries. As of January 2026, the index stood at 3.40%.1Wells Fargo. Adjustable-Rate Mortgage Index If your mortgage is tied to COSI, your monthly payment rises or falls with that figure, within the caps written into your loan.
What COSI Actually Measures
Unlike benchmarks built from Treasury yields or interbank lending, COSI reflects a single bank’s own funding costs. The number moves based on how Wells Fargo prices its CDs, not on broader market activity. Because of that, it tends to react slowly. When the Federal Reserve raises or lowers rates, COSI drifts on its own schedule. That lag can work for you when market rates spike, and against you when they fall, since your rate may stay elevated longer than borrowers on a market-wide index would see.
How the Index Is Calculated and Published
Wells Fargo computes the index on the last business day of each month by taking the weighted average of interest rates across all qualifying individual CD accounts, with larger balances carrying more weight.1Wells Fargo. Adjustable-Rate Mortgage Index The result is the Monthly COSI, and it is generally released at the end of the following month. January’s value, for example, is published at the end of February.
Some loan contracts reference a Moving Average COSI instead. That version averages the Monthly COSI across several consecutive months, smoothing out short-term movement. Check your loan documents to see which version applies to you and how many months the average covers.
How COSI Sets Your Mortgage Rate
Your interest rate on a COSI-linked ARM has two parts: the current index value and a fixed margin set in your loan agreement. If the COSI is 3.40% and your margin is 2.50%, your fully indexed rate is 5.90%. The margin never changes. The COSI portion changes at each adjustment, and most COSI-linked loans adjust monthly.
Your original promissory note spells out your exact margin, how often the rate adjusts, and the caps that limit each move. If you don’t have the note handy, your servicer can confirm these details.
The Caps That Limit How Fast Your Rate Can Move
Even with monthly adjustments, your contract limits how much the rate can change. There are typically three caps:2Consumer Financial Protection Bureau. What Are Rate Caps With an Adjustable-Rate Mortgage (ARM), and How Do They Work
- An initial adjustment cap, which limits the first rate change after any introductory fixed period, commonly two or five percentage points above or below the starting rate.
- A periodic adjustment cap, which limits each later change, often one or two percentage points from the previous rate.
- A lifetime cap, which limits the total increase over the life of the loan, most commonly five percentage points above the initial rate. Some loans also set a floor.
If you’re not sure which numbers apply, call your servicer and ask by name for the initial, periodic, and lifetime caps.
Watch for Negative Amortization on Older Loans
Some COSI-linked mortgages, particularly older option ARMs, included a payment cap that was separate from the interest rate cap. The payment cap limited how much your monthly payment could climb in a given year, even if the rate rose further. When the capped payment didn’t cover the interest owed, the shortfall was added to your loan balance. This is negative amortization: your balance grows even though you pay on time every month.3Office of the Comptroller of the Currency. Interest-Only Mortgage Payments and Payment-Option ARMs
These loans typically recast every five years, recalculating the required payment against the actual remaining balance. At recast, borrowers sometimes faced payments double or triple what they had been paying.3Office of the Comptroller of the Currency. Interest-Only Mortgage Payments and Payment-Option ARMs If the balance grew past a set threshold (often 110% to 125% of the original loan), the lender could trigger an earlier recast.
If your loan has a payment cap, look at your monthly statement to confirm you’re paying enough to cover the full interest charge. The statement should show whether any unpaid interest is being added to your principal.
Where to Find the Current COSI Value
Wells Fargo publishes the current Monthly COSI on its corporate website, updated once per month to reflect the prior month’s last business day.1Wells Fargo. Adjustable-Rate Mortgage Index Remember the roughly one-month publication lag when you compare dates.
When an adjustment notice arrives from your servicer, cross-check the index value it uses against the figure Wells Fargo published. If they don’t line up, call your servicer before paying the new amount.
The Notice You Must Receive Before Each Adjustment
Federal law requires your servicer to send a written notice before your rate changes. Under Regulation Z, that notice must arrive at least 60 days, and no more than 120 days, before your first payment at the new rate is due.4Consumer Financial Protection Bureau. 12 CFR 1026.20 Disclosure Requirements Regarding Post-Consummation Events For ARMs that adjust every 60 days or more often, the window shortens to at least 25 days before the new payment is due.
Each notice must show:
- Your current and new interest rates, side by side.
- Your current and new payment amounts in dollars.
- The specific index value used to calculate the new rate, with information on where you can look it up yourself.
- The effective date of the new rate and the date of the next scheduled adjustment.4Consumer Financial Protection Bureau. 12 CFR 1026.20 Disclosure Requirements Regarding Post-Consummation Events
For the very first rate adjustment on the loan, the notice has to come earlier: at least 210 days before the first adjusted payment is due, giving you roughly seven months to prepare.5Consumer Financial Protection Bureau. 12 CFR 1026.19 Certain Mortgage and Variable-Rate Transactions The disclosure must be clear and in a form you can keep, whether mailed or sent electronically.6Consumer Financial Protection Bureau. 12 CFR 1026.17 General Disclosure Requirements
What Happens if COSI Is Discontinued
Because COSI is maintained by a single company, it could in principle stop being published. If that happens, federal rules let the lender switch a closed-end mortgage to a comparable replacement index without treating the change as a refinancing, which means no new application and no new origination fees.7Federal Register. Facilitating the LIBOR Transition (Regulation Z)
To qualify as comparable, the replacement must have historical movements similar to COSI, and the new index plus any adjusted margin must produce a rate close to what you were already paying.7Federal Register. Facilitating the LIBOR Transition (Regulation Z) If the lender substitutes something that isn’t comparable, the swap can be treated as a refinancing, triggering new disclosures and possibly new terms. Your loan agreement may also include fallback language naming the replacement index in advance. Check that section so you know what to expect.
Refinancing Out of a COSI Loan
If you’d rather have a predictable payment, you can refinance a COSI-linked ARM into a fixed-rate mortgage, provided you meet the new lender’s requirements for credit score, income, and equity. You can also refinance into an ARM tied to a more widely used benchmark. Closing costs typically run 2% to 6% of the loan balance, so weigh them against the savings or stability you’d gain.
How long you plan to stay in the home matters. If you expect to sell within a few years, closing costs may wipe out the benefit. If you plan to stay longer and your current rate is climbing, locking in a fixed rate removes the uncertainty built into a proprietary index. New COSI-linked loans are uncommon today, so refinancing is typically the only way to leave the index while keeping the home.