'Variable Interest Rates on Mortgage Loans' to Decrease...KOPIS Falls to 2% Range for the First Time in Two and a Half Years

A counter at a commercial bank in Seoul. Photo by Jinhyung Kang aymsdream@

The COFIX, the benchmark for variable interest rates on mortgage loans in the banking sector, has fallen for five consecutive months.

According to the Korea Federation of Banks on the 17th, the COFIX based on new transactions in February was recorded at 2.97%, down 0.11 percentage points from January's 3.08% per annum. Continuing its decline for five months in a row, it dropped into the 2% range for the first time in two and a half years since August 2022 (2.96%). The COFIX based on outstanding balances also decreased by 0.06 percentage points from 3.42% to 3.36%.

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. The newly introduced 'new outstanding balance-based COFIX' since June 2019 also fell by 0.03 percentage points from 2.92% to 2.89%.

Commercial banks plan to apply the COFIX rates disclosed on this day to new variable-rate mortgage loans starting from the 18th.

At KB Kookmin Bank, the variable interest rate (6 months) based on the COFIX for new mortgage loans will decrease by 0.11 percentage points from 4.45?5.85% to 4.34?5.74%. Similarly, Woori Bank's variable interest rate (6 months) based on the COFIX for new mortgage loans will also drop from 4.43?4.93% to 4.32?5.82%.