Starting Tomorrow, Mortgage Loan Rates Rise Again...KOFIX at 3.4%, Highest in 10 Years

COFIX at 3.4% Based on New Handling Amount in September, Up 0.44%p from Previous Month

[Image source=Yonhap News]

[Asia Economy Reporter Sim Nayoung] From the 18th, the variable interest rates on mortgage loans (hereinafter referred to as "mudamdae") at commercial banks will rise again. This is because the COFIX (Cost of Funds Index), which serves as the benchmark for banks' variable mortgage loan interest rates, has increased by 0.44 percentage points (p) due to the recent rise in the base interest rate and market interest rates over the past month.

According to the Korea Federation of Banks on the 17th, the COFIX based on new transactions in September was 3.40%, up 0.44%p from 2.96% in August. This is the highest level in 10 years and 2 months since the COFIX based on new transactions in July 2012 (3.40%). The increase of 0.44%p is the largest in two months since July (0.52%p).

COFIX is the weighted average interest rate of funds raised by eight domestic banks. It reflects changes in interest rates of deposit products such as actual deposits, savings, and bank bonds handled by banks. When COFIX falls, banks can secure funds by paying less interest, and when COFIX rises, banks must pay more interest to secure funds.

The COFIX based on outstanding balances rose by 0.27%p from 2.25% to 2.52%. The newly introduced "New Outstanding Balance-based COFIX" (2.04%) since June 2019 also increased by 0.25%p within a month.

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