COFIX for Variable-Rate Mortgages Drops to 2.49% in August, Marking 11th 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 11 consecutive months.

According to the Korea Federation of Banks on September 15, the COFIX based on new loan issuance in August was recorded at 2.49%, down 0.02 percentage points from 2.51% in July, marking an 11-month downward trend. The COFIX based on outstanding balances also fell by 0.06 percentage points, from 3% to 2.94%.

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 and time deposits, as well as bank bonds actually handled by banks. The "new outstanding balance-based COFIX," introduced in 2019, also dropped by 0.05 percentage points, from 2.59% to 2.54%.

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

Yonhap News Agency

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