How CODI loan works?

Guest 0.10 Dollars($)

Hi All,

Can anyone tell me how does a CODI loan work?

Regards

Guest 0.10 Dollars($)

Hi Gina,

CODI (Cost Of Deposit Index) is a twelve month moving average of the three month certificates of deposit index, as published by the Federal Reserve Board. When the interest rate resets, it adjusts to the current level of the index plus the pricing spread, similar to any adjustable-rate mortgage.

Unlike the prime rate or discount rate, rates on CODI loans don't rise or fall as rapidly as market interest rates. This is mainly due to the 12 month moving average which is offset by some higher and some lower CD yields.

A CODI loan is based on one of the most stable indexes currently available. It is the sum of what banks are paying to their depositors on their 3-month CD accounts. The overall index is calculated by using an average, of an average, of an average.

The process works somewhat like this: daily average is taken for these 3-month CDs and then those daily values are added together for one month. The sum is then divided by the number of days in the month to reach a monthly value. Finally, this current monthly value obtained is added to the previous 11 monthly values and the sum is divided by 12 to give the current CODI Index.

Hope you will benefit from this information.

Regards,
Jason

Jessica · Posted: Mon Nov 28, 2005 11:22 pm Post subject: CODI rate index

CODI index is an annual average of rates and therefore it is very steady and do not react quickly to any changes in the market. Below we have provided you with a list of CODI rates over the last 12 months.

Period	CODI Rate
Jul 2005	2.6583
Aug 2005	2.8325
Sep 2005	3.000
Oct 2005	3.1742
Nov 2005	3.3450
Dec 2005	3.5117
Jan 2006	3.670
Feb 2006	3.836
Mar 2006	3.995
Apr 2006	4.157
May 2006	4.318
Jun 2006	4.482

All times are GMT - 7 Hours

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