On the 16th, Variable Interest Rate on Mortgage Loans Rises by 0.12 Percentage Points... COFIX Turns Upward

COFIX Based on New Handling Amount in May
3.56%, 0.12 Percentage Points Higher Than April (3.44%)

Bank deposit and withdrawal counter and loan counter. Photo by Jinhyung Kang aymsdream@

From the 16th, the variable interest rate on mortgage loans at commercial banks will increase by 0.12 percentage points.

This is because the COFIX (Cost of Funds Index), which serves as the benchmark for variable mortgage loan rates at banks, rose again following an increase in deposit and bank bond interest rates last month.

According to the Korea Federation of Banks on the 15th, the COFIX based on new contracts in May was recorded at 3.56%, 0.12 percentage points higher than April's 3.44%.

The COFIX based on outstanding balances also rose by 0.03 percentage points, from 3.73% to 3.76%.

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 is true. Loan interest rates also decrease when COFIX falls and increase when it rises.

The newly introduced "New Outstanding Balance-based COFIX" (3.14%) since June 2019 also rose by 0.05 percentage points in one month.

Commercial banks plan to apply the COFIX rates disclosed on this day to new variable mortgage loan interest rates starting from the 16th.

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