From Tomorrow, Commercial Banks' Mortgage Loan Interest Rates Increase by 0.1%P (Comprehensive)

New Loan Amount-Based COFIX at 0.92%
KB Kookmin, Woori, and NongHyup Banks to Reflect Mortgage Loan Rates Starting Tomorrow

[Image source=Yonhap News]

[Asia Economy Reporter Jin-ho Kim] The COFIX (Cost of Funds Index), which banks use as a benchmark to calculate variable-rate mortgage loan interest rates, has risen by 0.1 percentage points in just one month. Accordingly, the mortgage loan interest rates at major commercial banks are expected to increase starting tomorrow.

According to the Korea Federation of Banks on the 15th, the COFIX based on new loan amounts in June was 0.92%, up 0.1 percentage points from the previous month (0.82%). This is the largest increase in the past year. The COFIX based on new loan amounts has been on a steady rise since February this year (0.83%).

Accordingly, commercial banks will raise the variable interest rates on new mortgage loans starting from the 16th. For example, Woori Bank will increase the mortgage loan interest rates based on new loan amounts from 2.55?3.55% to 2.65?3.65%, a 0.1 percentage point rise. KB Kookmin Bank and NongHyup Bank will also adjust their mortgage loan interest rates based on new loan amounts to 2.49?3.99% and 2.45?3.66%, respectively.

However, the COFIX based on outstanding loan balances and the new outstanding loan balance COFIX remained unchanged from the previous month. The COFIX based on outstanding balances was 1.02%, and the new outstanding balance COFIX was 0.81%.

COFIX refers to the weighted average interest rate of funds raised by eight domestic banks.

Products included in the COFIX calculation are time 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 COFIX additionally includes other deposits, other borrowings, and settlement funds.

The Korea Federation of Banks explained, "The COFIX based on outstanding balances and the new outstanding balance COFIX generally reflect market interest rate changes gradually, but the COFIX based on new loan amounts is calculated based on funds newly raised during the month, so it reflects market interest rate changes relatively quickly. Therefore, when applying for COFIX-linked loans, it is necessary to fully understand these characteristics and carefully select loan products."

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