Certificate of Deposit Index (CODI)

If you’re in the process of looking for a new home, then you’re probably in the process of looking for a mortgage you like, too. Finding the right house is important, of course, but finding the right mortgage might be even more so – living in the right house but with the wrong mortgage might not last too long. But chances are you found a great deal on a new home now that the real estate market is in free-fall. With prices dropping so steeply for so long now it’s clearly a buyer’s market. And now all that’s left to do is get your mortgage worked out and approved. If you go for an adjustable rate mortgage, you might here a lot about interest rate indexes, and which one your mortgage interest rate will be linked to. One of these well-known indexes is the Certificate of Deposit Index, referred to as CODI for short.

The Certificate of Deposit Index, or CODI, is a complicated thing that most people are going to need some time to understand. In essence, CODI is the average yield, tracked over a 12-month period, on three-month certificates of deposit. These figures are released by the H. 15 Federal Reserve Statistical Release, which is published the first Monday of every month.

As compared with other interest rate indexes to which adjustable rate mortgages can be linked, the Certificate of Deposit Index is considered to be more stable, and takes longer to respond to changes in the market.

To learn more about mortgages, mortgage rate indexes, and the Certificate of Deposit Index, be sure to consult with a financial advisor. He or she can walk you through all the industry-specific jargon that accompanies home buying and mortgage lending. With more information and more clarity you’re sure to make smarter decisions with your money.