3.56% Based on New Transaction Amount in March
The COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on mortgage loans in the banking sector, also rose slightly for the first time in four months. Accordingly, the variable interest rates on mortgage loans at commercial banks are expected to increase slightly on the 18th.
According to the Korea Federation of Banks on the 17th, the COFIX based on new transactions in March was recorded at 3.56%, up 0.03 percentage points from 3.53% in February. It had been declining continuously from December last year through February this year, but the downward trend stopped after four months. The COFIX based on outstanding balances also rose 0.04 percentage points from 3.67% to 3.71%.
A representative from a commercial bank explained, "At this level, COFIX should be interpreted as showing a stable trend," adding, "Deposit interest rates and bank bond yields were almost at the same level as last month."
COFIX is the weighted average interest rate of funds raised by eight domestic banks. It reflects changes in interest rates of deposit products such as actual deposits, savings, and bank bonds handled by banks. When COFIX falls, it means banks can secure funds by paying less interest, and when COFIX rises, the opposite is true.
The newly introduced "New Outstanding Balance-based COFIX" (3.08%), implemented since June 2019, also rose by 0.01 percentage points in one month.
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