LIBOR is a common index that stands for the London Inter Bank Offering Rate. It is the average interest rate that London banks trade on deposits. Generally the LIBOR index is the most volatile, it can fluctuate the biggest amount and the most frequently.

Prime is an index that is very widely used. The prime rate index is an index that is heavily used by credit card companies, second mortgage lenders, and home equity lines of credit among many others. The Prime rate is what you always hear about in the news going up and down, but most recently going a lot more up (3/1/06).

The COFI, or the 11th District Cost of Fund Index, is the average interest expenses incurred by member banks in the 11th Federal Home Loan Bank district. The 11th district refers to California, Arizona and Nevada. The interest expenses on deposits such as savings and checking accounts, CD's, money market accounts, etc. are reported by the member institutions.

The Cost of Deposits Index (CODI) is based on rates the bank pays on three-month certificates of deposits. It is characteristically slow to move both up and down.

MTA is the Monthly Treasury Average. This index averages the past 12 months average yields on U. S. Treasury securities. Since it is a 12 month average the index is more stable, slower to adjust and generally lags the market for both upward and downward trends.

COSI - cost of savings index. Similar to COFI except it is one particular Bank's own deposit accounts. The Bank borrows money from consumers in the form of deposits, i.e. C/D's, checking and savings accounts, and then lends the money out as home mortgages.

Your mortgage broker will be able to guide you with your decision of choosing the right index for your situation.