Variable Interest Rate on Mortgage Loans to Rise Again... 0.14% Point Increase on the 18th

June KOFIX 3.70%
Up 0.14 percentage points from May (3.56%)

From the 18th, interest rates on mortgage loans at commercial banks will rise. This is due to the increase in deposit and savings interest rates and bank bond yields at commercial banks last month, which affected the COFIX (Cost of Funds Index), the benchmark for variable interest rates on mortgage loans in the banking sector.

According to the Korea Federation of Banks on the 17th, the COFIX based on new transactions in June was recorded at 3.70%, up 0.14 percentage points from 3.56% in May. Commercial banks plan to apply the COFIX rate announced on this day to new variable-rate mortgage loans starting from the 18th.

COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting 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.

Previously, COFIX, which had fallen below the base rate (3.50%) to 3.44% in April, rebounded in May and maintained an upward trend in June. The balance-based COFIX also rose by 0.04 percentage points from 3.76% to 3.80%.

The newly introduced 'New Balance-based COFIX' (3.18%) since June 2019 also increased by 0.04 percentage points in one month. The new balance COFIX additionally includes other deposits, borrowings, and settlement funds in its calculation.

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