Bank Mortgage Loan Variable Interest Rate Benchmark COFIX Falls by 0.05%p in One Month

Balance-Based Increase of 0.07 Percentage Points - New Balance-Based Increase of 0.05 Percentage Points

[Asia Economy Reporter Yoo Je-hoon] The COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on mortgage loans in the banking sector, has fallen by 0.05 percentage points.

According to the Korea Federation of Banks on the 15th, the COFIX based on new loan amounts last month was 1.65%, down 0.05 percentage points from 1.69% in December of last year. This is the first decline in COFIX in eight months since June last year.

On the other hand, the outstanding balance-based COFIX rose by 0.07 percentage points to 1.37% compared to the previous month, and the new outstanding balance-based COFIX also increased by 0.05 percentage points to 1.08%.

Commercial banks will apply the COFIX rate level announced for last month to new mortgage loan variable interest rates starting from the 16th.

COFIX is the weighted average interest rate of funds raised by eight domestic banks (KB Kookmin, Shinhan, Hana, Woori, NongHyup, Industrial Bank of Korea, SC Jeil, and Korea Citibank), reflecting changes in interest rates of deposit products such as actual deposits, savings, and bank bonds handled by banks, causing it to rise or fall accordingly.

For the outstanding balance-based and new outstanding balance-based COFIX, market interest rate changes are generally reflected gradually, but the COFIX based on new loan amounts is calculated based on funds newly raised in the current month, so market interest rate changes are reflected relatively quickly.

The Korea Federation of Banks stated, "Those who wish to take out COFIX-linked loans need to understand these characteristics of COFIX and carefully select loan products."

Meanwhile, the short-term COFIX announced over the past four weeks was surveyed at 1.40% to 1.56%. The short-term COFIX is calculated based on short-term funds with a contract maturity of three months.

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