March New Handling Amount COFIX 0.84%... 0.01%p Increase from Previous Month

COFIX Based on New Handling Amount in March Rises by 0.01%p
COFIX Based on Balance and New Balance Falls by 0.03%p

[Asia Economy Reporter Park Sun-mi] The COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on mortgage loans in the banking sector, has slightly increased based on new transaction amounts.

According to the Korea Federation of Banks on the 15th, the COFIX based on new transaction amounts for March was 0.84%, up 0.01 percentage points (p) from February's 0.83%. After showing a downward trend for two consecutive months in January (0.86%) and February (0.83%) following December last year (0.90%), the COFIX based on new transaction amounts slightly rebounded in March.

Commercial banks will reflect the March COFIX rate level, announced on this day, in new variable-rate mortgage loans starting from the 16th. 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.

On the other hand, the COFIX based on outstanding balances decreased by 0.03 percentage points to 1.06% in March from 1.09% in February. The COFIX based on new outstanding balances also recorded 0.84% in March, down 0.03 percentage points from 0.87% in February. Since the COFIX based on new transaction amounts is calculated based on funds newly raised during the relevant month, it tends to reflect market interest rate changes more quickly, whereas the COFIX based on outstanding balances and new outstanding balances generally reflect market interest rate changes gradually.