COFIX, Benchmark for Variable Mortgage Rates, Rises for 3rd Consecutive Month to Hit 3% Range for First Time in 17 Months

The COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on bank mortgage loans, has risen for three consecutive months, reaching the 3% range.

According to the Korea Federation of Banks today (July 15), the new COFIX for June was recorded at 3.05%, up 0.15 percentage points from 2.90% per annum in May.

This marks the first time the new COFIX has reached the 3% range in 17 months, since January of last year.

The index has been on an upward trend for three months, starting from April.

The COFIX based on the outstanding balance also rose by 0.05 percentage points, from 2.89% to 2.94% per annum.

COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting changes in interest rates for deposit products such as time deposits, installment savings, and bank debentures that banks have actually handled.

A decline in COFIX means that banks can secure funds at a lower interest cost, while a rise indicates the opposite.

Specifically, the new COFIX and the balance-based COFIX are calculated based on the interest rates of deposit products, including time deposits, installment savings, mutual installments, housing installments, certificates of deposit (CDs), repurchase agreements (RPs), cover bills, and financial debentures (excluding subordinated bonds and convertible bonds).

The new balance-based COFIX rose from 2.50% to 2.54% per annum.

The new balance-based COFIX also includes interest rates on other deposits, borrowings, and settlement funds.

Commercial banks are expected to apply the COFIX rate announced today to new variable-rate mortgage loans starting as early as July 16.
※ Please note: This article was translated by AI and may contain errors.