Variable Mortgage Loan Interest Rates Rise Again... KOPIS Up 0.03%P to '0.95%'
[Asia Economy Reporter Song Seung-seop] The COFIX (Cost of Funds Index), which serves as the benchmark for calculating variable interest rate mortgage loans in the banking sector, has risen again. Pressure to raise mortgage loan interest rates at major commercial banks is expected to intensify further.
According to the Korea Federation of Banks on the 17th, the COFIX based on new transaction amounts for August was 0.95%, up 0.03 percentage points from the previous month (0.92%). After rising nearly 0.1 percentage points from May to June, it has increased once again. The COFIX based on new transaction amounts has been on an upward trend since February this year (0.83%).
COFIX refers to the weighted average interest rate of funds raised by eight domestic banks. Commercial banks will immediately reflect the July COFIX rate level in new variable-rate mortgage loans starting from the 18th.
The COFIX based on outstanding balances and the new outstanding balance COFIX remained the same as the previous month. The COFIX based on outstanding balances recorded 1.02%, and the new outstanding balance COFIX was 0.81%.
Products subject to COFIX include time deposits, installment savings, mutual installment savings, housing installment savings, negotiable certificates of deposit, repurchase agreements, commercial paper issuance, and financial bonds (excluding subordinated bonds and convertible bonds). The new outstanding balance COFIX additionally includes other deposits, other borrowings, and settlement funds.
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A Korea Federation of Banks official stated, “While the COFIX based on outstanding balances and the new outstanding balance COFIX generally reflect market interest rate changes gradually, the COFIX based on new transaction amounts is calculated based on funds newly raised during the month, so it reflects changes relatively quickly. Therefore, it is important to carefully select loan products when applying for COFIX-linked loans.”
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