COFIX for New Loans Rises to 2.82% in February, Reversing Upward After One Month

Korea Federation of Banks Announces February COFIX

New Loan Issuance Rate Up 0.05 Percentage Points from January

Balance-Based COFIX Remains Unchanged from Previous Month

The Cost of Funds Index (COFIX), which serves as the benchmark for variable-rate mortgage loans in the banking sector, has reversed course and risen after a month. The balance-based COFIX remained at the same level as the previous month, while the new balance-based COFIX saw a slight decline.

According to a public announcement by the Korea Federation of Banks on March 16, the COFIX based on new loan issuance for the previous month was 2.82%, up 0.05 percentage points from January 2026.

The new loan issuance-based COFIX had risen from 2.52% in September 2025 to 2.89% in December 2025, but then dropped to 2.77% in January 2026.

The balance-based COFIX recorded 2.85%, maintaining the same level as the previous month. In contrast, the new balance-based COFIX was tallied at 2.47%, down 0.01 percentage points from the previous month.

COFIX is the weighted average interest rate of funds raised by eight domestic banks (KB Kookmin, Hana, Shinhan, Woori, NH Nonghyup, Standard Chartered Korea, Citibank Korea, and Industrial Bank of Korea). It reflects changes whenever banks raise or lower deposit, savings, or bank bond interest rates on products they actually offer.

When COFIX falls, banks can secure funds at lower interest rates; conversely, if COFIX rises, they must pay higher interest to attract funds.

The COFIX based on new loan issuance and the balance-based COFIX both include time deposits, installment savings, mutual installment savings, housing installment savings, certificates of deposit (CD), repurchase agreements (RP), promissory notes, and financial debentures. The new balance-based COFIX also incorporates interest rates for other deposits, borrowings, and settlement funds.

The short-term COFIX (calculated for three-month maturity contracts), which has been disclosed over the past four weeks, ranged from 2.69% to 2.76%. The short-term COFIX announced on March 11 was 2.69%.

Commercial banks plan to apply the COFIX rates disclosed today to new variable-rate mortgage loans as early as March 17.

A representative of the Korea Federation of Banks stated, "If you intend to take out a COFIX-linked loan, you should thoroughly understand the characteristics of each index before carefully selecting a loan product."

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