The Cost of Savings Index, or COSI, is a proprietary benchmark Wells Fargo uses to set the variable interest rate on certain adjustable-rate mortgages. It reflects the weighted average of interest rates the bank pays individual depositors on their certificates of deposit. As of January 2026, the published value was 3.40%.1Wells Fargo. Adjustable-Rate Mortgage Index If your mortgage is tied to COSI, your monthly payment moves up or down as this number changes.
What COSI Actually Measures
COSI is not a market rate. It is the weighted average of all interest rates Wells Fargo pays on CDs held by individual depositors at its depository subsidiaries.1Wells Fargo. Adjustable-Rate Mortgage Index Larger CD balances count for more in the average. Because the number depends entirely on how one bank prices its deposits, it behaves differently from indices tied to Treasury yields or interbank lending.
In practice, that means COSI reacts slowly. When the Federal Reserve moves rates, Wells Fargo’s CD pricing follows on its own schedule. The lag can work for you when market rates spike, and against you when they fall, because your rate may stay elevated after broader benchmarks have already come down.
How the Index Is Calculated and Published
Wells Fargo calculates COSI on the last business day of each month and publishes the figure about a month later, after internal accounting closes.1Wells Fargo. Adjustable-Rate Mortgage Index January 2026 data, for example, was released at the end of February 2026.
Some loans reference a Moving Average COSI rather than the Monthly COSI. The moving-average version averages several consecutive Monthly COSI values to smooth short-term swings. Your loan documents state which version applies and how many months feed the average.
How COSI Sets Your ARM Payment
A COSI-linked adjustable-rate mortgage has two rate components: the current index value and a fixed margin. The margin is set at closing and does not change for the life of the loan. Your fully indexed rate is the index plus the margin. If COSI is 3.40% and your margin is 2.50%, your rate is 5.90%.
Most COSI loans adjust monthly. Each adjustment applies the latest index value plus your margin, subject to the caps in your contract. Your promissory note lists your margin, your adjustment frequency, and your cap structure.
Caps That Limit How Far Your Rate Can Move
Even with monthly adjustments, three caps typically constrain how much your rate can change:2Consumer Financial Protection Bureau. What Are Rate Caps With an Adjustable-Rate Mortgage (ARM), and How Do They Work
- An initial adjustment cap that limits the first change after any introductory fixed period, commonly two or five percentage points.
- A periodic adjustment cap that limits each later change, commonly one or two percentage points from the previous rate.
- A lifetime cap that limits total increase over the loan, commonly five percentage points above the starting rate. Some loans also set a floor.
If you are not sure which caps apply to your loan, call your servicer and ask for the initial, periodic, and lifetime cap figures by name.
Negative Amortization on Older Option ARMs
Some older COSI-linked option ARMs included a payment cap in addition to a rate cap. The payment cap limited how much the monthly payment could rise in a year, even when the interest rate rose by more. When the capped payment did not cover the full interest owed, the unpaid interest was added to the loan balance. The balance grew even though every payment was made on time.3Office of the Comptroller of the Currency. Interest-Only Mortgage Payments and Payment-Option ARMs
These loans usually recast every five years, recalculating the payment against the actual balance. Recast payments were often much larger than the previous ones, sometimes double or triple.4Office of the Comptroller of the Circle. Interest-Only Mortgage Payments and Payment-Option ARMs If the balance grew past a set threshold, commonly 110% to 125% of the original loan amount, the lender could recast early.
If your loan has a payment cap distinct from its rate cap, check whether your current payment covers the full monthly interest. Your statement should show any deferred interest being added to the balance.
Notices You Should Receive Before Each Adjustment
Under Regulation Z, your servicer must send written notice before any rate change takes effect. For most ARMs the notice comes at least 60 and no more than 120 days before the first payment at the new rate is due.5Consumer 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 is at least 25 days before the new payment is due.
Each notice must show your current and new interest rates, your current and new payment amounts, the specific index value used and where to find it independently, and the effective date of the change along with when future adjustments are scheduled.5Consumer Financial Protection Bureau. 12 CFR 1026.20 Disclosure Requirements Regarding Post-Consummation Events
The very first rate adjustment on your loan comes with a longer runway. You are entitled to notice at least 210 days before that first adjusted payment is due, roughly seven months.6Consumer Financial Protection Bureau. 12 CFR 1026.19 Certain Mortgage and Variable-Rate Transactions All of these disclosures must be delivered in a form you can keep.7Consumer Financial Protection Bureau. 12 CFR 1026.17 General Disclosure Requirements
What Happens if Wells Fargo Stops Publishing COSI
Because COSI is maintained by one company, it could stop being published. Federal rules let a lender switch a closed-end mortgage to a comparable replacement index without treating the change as a refinancing, so you would not go through a new application or pay origination fees.8Federal Register. Facilitating the LIBOR Transition (Regulation Z)
To qualify as comparable, the new index must have historical movements similar to COSI, and the new index combined with any adjusted margin must produce a rate similar to what you were paying before.8Federal Register. Facilitating the LIBOR Transition (Regulation Z) A substitution that fails that test could be treated as a refinancing and trigger full new disclosures and terms. Your loan documents may also spell out specific fallback language. Read that section so you know which index Wells Fargo would use.
Where to Check the Current Value
Wells Fargo posts the current Monthly COSI on its corporate website, updated once per month with data from the prior month’s last business day.1Wells Fargo. Adjustable-Rate Mortgage Index When an adjustment notice arrives, compare the index figure on the notice to the published value. If they do not match, contact your servicer for an explanation before paying at the new amount. Remember the roughly one-month lag between the data period and publication.
Refinancing Out of a COSI Loan
You can refinance a COSI-linked ARM into a fixed-rate mortgage or into an ARM tied to a more common index such as SOFR, provided you meet a new lender’s credit, income, and equity requirements. SOFR and the one-year Constant Maturity Treasury are the standard indices for newly originated ARMs today, and HUD-insured ARMs must use one of them.9Federal Register. Adjustable Rate Mortgages: Transitioning From LIBOR to Alternate Indices New COSI-linked loans are uncommon.
Closing costs on a refinance typically run 2% to 6% of the loan balance. If you plan to sell within a few years, those upfront costs can outweigh the savings. If you plan to stay and your rate is climbing, refinancing into a fixed rate removes the monthly uncertainty that comes with a proprietary index.