Variable Mortgage Loan Rates Rise Again... New COFIX Up 0.14%p to 1.69%

Seven Consecutive Months of Increase Since May Last Year

[Image source=Yonhap News]

[Asia Economy Reporter Jin-ho Kim] The COFIX (Cost of Funds Index), which serves as the benchmark for calculating variable interest rates on mortgage loans in the banking sector, has risen by 0.14 percentage points in one month. Accordingly, the mortgage loan interest rates at major banks are expected to increase starting tomorrow.

According to the Korea Federation of Banks on the 17th, the COFIX based on new loan amounts as of December last year was 1.69%, up 0.14 percentage points from 1.55% the previous month. The new COFIX has been rising for seven consecutive months since May last year.

The COFIX based on outstanding loan balances also rose by 0.11 percentage points to 1.30%, and the new outstanding balance COFIX recorded 1.03%, increasing by 0.09 percentage points.

COFIX refers to the weighted average interest rate of funds raised by eight domestic banks, including NH Nonghyup, Shinhan, Woori, SC Jeil, Hana, Industrial Bank of Korea, KB Kookmin, and Korea Citibank. It moves in response to increases or decreases in interest rates on deposit products such as actual deposits, savings, and bank bonds handled by banks.

However, 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 loan amounts is calculated based on funds newly raised during the relevant month, so it tends to reflect market interest rate changes more quickly.

With the rise in COFIX, the variable mortgage loan interest rates set by banks reflecting this are also expected to increase simultaneously from June 18.

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