Mortgage Loan Interest Rates Decrease... KOFIS All Drop Simultaneously

[Asia Economy Reporter Kwon Haeyoung] The interest burden for users of variable-rate mortgage loans is expected to decrease across the board.

The Korea Federation of Banks announced on the 15th that the COFIX (Cost of Funds Index) based on new transactions in December fell by 0.03 percentage points from the previous month to 1.6%. The COFIX based on outstanding balances dropped by 0.03 percentage points to 1.78% during the same period, and the new outstanding balance-based COFIX also decreased by 0.06 percentage points to 1.49% compared to the previous month.

COFIX is the weighted average interest rate of funds raised by eight domestic banks. It rises or falls reflecting increases or decreases in the interest rates of deposit products such as actual deposits, savings, and bank bonds handled by banks.

The COFIX based on new transactions and the COFIX based on outstanding balances include fixed deposits, installment savings, mutual installment savings, housing installment savings, negotiable certificates of deposit, repurchase agreements, commercial paper sales, and financial bonds (excluding subordinated bonds and convertible bonds). The new outstanding balance-based COFIX additionally includes other deposits, other borrowings, and settlement funds.

A representative from the Korea Federation of Banks said, "While the COFIX based on outstanding balances and the new outstanding balance-based COFIX generally reflect market interest rate changes gradually, the COFIX based on new transactions is calculated based on funds newly raised during the month, so it reflects market interest rate changes relatively quickly," adding, "It is necessary to fully understand these characteristics and carefully select loan products when applying for COFIX-linked loans."

This content was produced with the assistance of AI translation services.