From Tomorrow, Commercial Bank Mortgage Loan Interest Rates Drop by 0.03%P (Comprehensive)

Variable Mortgage Loan Standard CofiX Declines for Two Consecutive Months

[Asia Economy Reporter Park Sun-mi] From the 16th of this month, the interest rates on variable-rate mortgage loans handled by commercial banks will slightly decrease. This is due to the decline in the COFIX (Cost of Funds Index), which serves as the benchmark for variable mortgage loan rates.

On the 15th, the Korea Federation of Banks announced that the COFIX based on new loan amounts for February fell by 0.03 percentage points to 0.83% compared to the previous month. This marks a decline for two consecutive months since it recorded 0.90% in December last year. The COFIX based on outstanding loan balances also dropped by 0.04 percentage points to 1.09%, and the new outstanding balance-based COFIX recorded 0.87%, down 0.03 percentage points from the previous month.

Accordingly, some commercial banks will slightly lower the variable interest rates on new mortgage loans starting from the 16th.

Commercial banks such as KB Kookmin, Woori, and NH Nonghyup will reduce the interest rates on variable-rate mortgage loan products by 0.03 percentage points. The variable mortgage loan rates linked to the COFIX based on new loan amounts are 2.48~3.98% at KB Kookmin Bank, 2.51~3.61% at Woori Bank, and 2.41~3.62% at NH Nonghyup Bank. These figures represent a 0.03 percentage point decrease compared to the previous rates.

The mortgage loan rates linked to the new outstanding balance-based COFIX will also decrease by 0.03 percentage points starting on the same day. The rates are 2.64~4.14% at Kookmin Bank, 2.55~3.65% at Woori Bank, and 2.45~3.66% at NH Nonghyup Bank. This is also due to the new outstanding balance-based COFIX falling by 0.03 percentage points to 0.87% compared to the same period last month. The outstanding balance-based COFIX dropped by 0.04 percentage points to 1.09% compared to the previous month.

COFIX is the weighted average interest rate of funds raised by eight domestic banks. When banks raise or lower interest rates on deposit products such as savings and time deposits or bank bonds that they actually handle, COFIX reflects these changes by rising or falling accordingly. While the outstanding balance-based COFIX and new outstanding balance-based COFIX generally reflect market interest rate changes gradually, the COFIX based on new loan amounts is calculated based on funds newly raised during the month, so it tends to reflect market interest rate changes more quickly.

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