Record Largest Increase in COFIX... Variable-Rate Mortgage Loan Interest Rates Rise Again (Comprehensive)
KB Kookmin Bank Applies 3.85~5.05% from the 16th
Woori Bank Also Raises by 0.26%p and Applies
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[Asia Economy Reporter Park Sun-mi] The COFIX (Cost of Funds Index), which banks use as a benchmark to calculate variable-rate mortgage loan interest rates, has risen by 0.26 percentage points in one month. Starting tomorrow, the mortgage loan interest rates applied by banks are also expected to increase.
According to the Korea Federation of Banks on the 15th, the COFIX based on new contracts in November was 1.55%, up 0.26 percentage points from 1.29% in the previous month. This is the largest increase since the COFIX was first announced. The new COFIX has risen for six consecutive months since May, reaching the highest level of the year.
The COFIX based on outstanding balances also rose by 0.08 percentage points to 1.19%, and the new outstanding balance-based COFIX recorded 0.94%, up 0.05 percentage points.
COFIX refers to the weighted average interest rate of funds raised by eight domestic banks, including NH Nonghyup, Shinhan, Woori, SC First Bank, Hana, Industrial Bank of Korea, KB Kookmin, and Citibank Korea. It moves in response to increases or decreases in interest rates of deposit products such as actual deposits, savings, and bank bonds handled by banks. Generally, the outstanding balance-based COFIX and the new outstanding balance-based COFIX reflect market interest rate changes gradually, whereas the new contract-based COFIX is calculated based on funds newly raised during the month, so it reflects market interest rate changes more quickly.
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As COFIX rises, the variable-rate mortgage loan interest rates set by banks reflecting this are expected to increase simultaneously from the 16th. KB Kookmin Bank’s mortgage loan interest rates linked to the new COFIX will be applied at 3.85?5.05% starting from the 16th of this month. Woori Bank’s mortgage loan interest rates based on the new COFIX will also change from the previous 3.58?4.09% to 3.84?4.35%.
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