April COFIX Decline Leads to Lower Variable Mortgage Rates at Some Commercial Banks (Comprehensive)
[Asia Economy Reporter Park Sun-mi] As the COFIX (Cost of Funds Index), which serves as the benchmark for variable-rate mortgage loans at commercial banks, slightly declined, some commercial banks are lowering their mortgage loan interest rates marginally.
On the 17th, the Korea Federation of Banks announced that the COFIX based on new loan amounts for April stood at 0.82%, down 0.02 percentage points from the previous month. This new loan amount-based COFIX is the lowest since August last year (0.80%). The outstanding balance-based COFIX recorded 1.04%, down 0.02 percentage points from the previous month, and the new outstanding balance-based COFIX was 0.81%, down 0.03 percentage points from the previous month.
COFIX refers to the weighted average interest rate of funds raised by eight domestic banks. When banks raise or lower interest rates on deposit products such as actual deposits, savings, and bank bonds, 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 new loan amount-based COFIX is calculated based on funds newly raised during the month, thus reflecting market interest rate changes more promptly.
Reflecting the announced COFIX, some commercial banks will lower their variable-rate mortgage loan interest rates starting from the 18th.
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KB Kookmin Bank will adjust its mortgage loan interest rates based on the new COFIX to a range of 2.37% to 3.87%, and based on the new outstanding balance COFIX to 2.48% to 3.98%. Woori Bank will adjust its mortgage loan interest rates based on the new COFIX from 2.55%?3.55% to 2.53%?3.53%, and based on the new outstanding balance COFIX from 2.55%?3.55% to 2.52%?3.52%. NH Nonghyup Bank will apply rates based on the new COFIX from the previous 2.37%?3.58% to 2.35%?3.56%, and based on the new outstanding balance COFIX from 2.37%?3.58% to 2.34%?3.55%.
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