KOFIX Rises for Third Consecutive Month Surpassing 1%... Variable Rate on Mortgage Loans Increases (Comprehensive)

[Asia Economy Reporter Park Sun-mi] The COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on mortgage loans in the banking sector, has risen by 0.07 percentage points.

On the 15th, the Korea Federation of Banks announced that the August COFIX based on new contracts recorded 1.02%, up 0.07 percentage points from the previous month. This marks the third consecutive month of increase since June. The COFIX based on new contracts exceeding 1% is the first time in 15 months since it was 1.06% in May last year.

The COFIX based on outstanding balances also rose by 0.02 percentage points to 1.04%, and the new outstanding balance-based COFIX increased by 0.02 percentage points to 0.83%.

COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting changes when banks raise or lower interest rates on deposit products such as savings and time deposits, and bank bonds. It is interpreted that the Bank of Korea's recent base rate hike from 0.50% to 0.75% last month was slightly reflected in COFIX as well.

The outstanding balance-based and new outstanding balance-based COFIX generally reflect market interest rate changes gradually, whereas the COFIX based on new contracts is calculated based on funds newly raised during the month, so it tends to reflect market interest rate changes more quickly.

Commercial banks will apply the August COFIX rate level disclosed on this day to new variable-rate mortgage loans starting from the 16th. Woori Bank's new COFIX-linked mortgage loan interest rate, which was 2.93% to 3.64% annually until this day, will be adjusted upward by 0.07 percentage points to 3.00% to 3.71% from the 16th. NH Nonghyup Bank's new COFIX-linked mortgage loan interest rate will also change from the existing 2.71% to 3.62% to 2.78% to 3.69%.

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