COFIX Variable Mortgage Rate Drops to 2.51% in July, Marking 10th Consecutive Month of Decline

The Cost of Funds Index (COFIX), which serves as the benchmark for variable-rate mortgage loans in the banking sector, has declined for ten consecutive months.

According to the Korea Federation of Banks on August 18, the COFIX based on newly handled loan amounts for July was recorded at 2.51%, down 0.03 percentage points from 2.54% in June, marking a ten-month downward trend. The COFIX based on outstanding balances also fell by 0.07 percentage points, from 3.07% to 3%.

Yonhap News Agency

The COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting changes in the interest rates of deposit products such as savings, time deposits, and bank bonds actually handled by banks. The "new outstanding balance-based COFIX," which was introduced in 2019, also dropped by 0.04 percentage points, from 2.63% to 2.59%.

The Korea Federation of Banks stated, "While the outstanding balance-based COFIX and the new outstanding balance-based COFIX generally reflect changes in market interest rates gradually, the new loan-based COFIX reflects market rate changes more quickly, as it is calculated based on funds newly raised during the month." The federation added, "Those seeking COFIX-linked loans should fully understand these characteristics and carefully select loan products."

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