3.69% Based on New Handling Amount
Influenced by Deposit Interest Rate Decline
The COFIX (Cost of Funds Index), which serves as the benchmark for variable interest rates on mortgage loans in the banking sector, has declined for the first time in three months. The slight drop in deposit interest rates last month is the cause. Commercial banks plan to apply the COFIX rate announced on the 17th to new variable-rate mortgage loans starting that day.
According to the Korea Federation of Banks on the 16th, the COFIX based on new transactions in July was recorded at 3.69%, down 0.01 percentage points from June's 3.70%. COFIX had previously fallen below the base rate (3.50%) in April (3.44%), then rebounded in May (3.56%) and maintained an upward trend through June (3.70%).
COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting changes in interest rates on deposit products such as demand and time deposits and bank bonds that banks actually handle. When COFIX falls, it means banks can secure funds by paying less interest, and when COFIX rises, the opposite is true.
Meanwhile, the balance-based COFIX rose by 0.03 percentage points from 3.80% to 3.83%. The 'new balance-based COFIX' (3.21%) also increased by 0.03 percentage points over the past month.
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