COFIX for Variable-Rate Mortgages Drops to 2.63% in May... Eighth Consecutive Month of Decline

The Cost of Funds Index (COFIX), which serves as the benchmark for variable-rate mortgage loans in the banking sector, has declined for eight consecutive months.

According to the Korea Federation of Banks on June 16, the COFIX based on new loan issuance in May was recorded at 2.63%, down 0.07 percentage points from 2.7% in April, marking an eight-month streak of declines. The balance-based COFIX also fell by 0.08 percentage points, from 3.22% to 3.14%.

COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting changes in the interest rates of deposit and savings products, as well as bank bonds actually handled by banks. The "new balance-based COFIX," which was newly introduced in June 2019, also dropped by 0.05 percentage points, from 2.76% to 2.71%.