'Breathing Room on Interest Burden'…Mortgage Variable Rate Drops by 0.05%p
COFIX Falls 0.05%p, Declines for the First Time in 11 Months
Variable Interest Rates on Mortgage Loans at Commercial Banks to Reflect Change from the 17th
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[Asia Economy Reporter Sim Nayoung] Since November last year, as deposit interest rates and bank bond rates of commercial banks have fallen, the COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on mortgage loans, has also slightly declined.
On the 16th, the Korea Federation of Banks announced that the COFIX based on new transactions in December last year was recorded at 4.29%, down 0.05 percentage points from 4.34% in November. This is the first time in 11 months since January last year (-0.05 percentage points) that COFIX has decreased compared to the previous month.
Commercial banks will reflect the COFIX rate disclosed on this day in the new variable interest rates for mortgage loans starting from the 17th, and loan interest rates are also expected to decline slightly.
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, it means banks can secure funds by paying less interest, and when COFIX rises, the opposite applies.
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Meanwhile, the balance-based COFIX rose by 0.33 percentage points from 3.19% to 3.52%. Both the new transaction-based COFIX and the balance-based COFIX reflect interest rates of deposit products such as time deposits, installment savings, mutual installment savings, housing installment savings, negotiable certificates of deposit, repurchase agreement sales, commercial paper sales, and financial bonds (excluding subordinated bonds and convertible bonds). The new balance-based COFIX, introduced in June 2019, also rose by 0.27 percentage points from the previous month to 2.92%.
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