Soaring Mortgage Rates... November COFIX Sees Largest Increase in Three Years (Comprehensive)

COFIX for Newly Issued Funds Rises by 0.24 Percentage Points
Upward Trend Continues for Third Consecutive Month

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

The Korea Federation of Banks announced on the 15th that last month’s COFIX based on newly issued funds recorded 2.81%, up 0.24 percentage points from the previous month. This marks the largest monthly increase in three years since November 2022, when it rose by 0.36 percentage points.

The COFIX based on outstanding balances remained unchanged from the previous month at 2.48%. However, the COFIX based on the balance method was calculated at 2.83%, down 0.01 percentage points from the previous month.

COFIX is the weighted average interest rate of funds raised by eight domestic banks. It reflects increases or decreases in deposit, savings, and bank bond rates actually handled by banks, rising or falling accordingly.

In particular, the COFIX based on newly issued funds is calculated using funds newly raised during the month, so it quickly reflects changes in market interest rates. As COFIX rises, major commercial banks are expected to adjust their mortgage rates as early as the 16th.

KB Kookmin Bank’s variable-rate mortgage (six-month term) based on the COFIX for newly issued funds will increase by 0.24 percentage points, from 3.91-5.31% to 4.15-5.55%. Woori Bank’s variable-rate mortgage (six-month term) based on the COFIX for newly issued funds will also rise from 3.84-5.04% to 4.08-5.28%.

Meanwhile, the short-term COFIX, based on posted rates over the past four weeks, ranged from 2.67% to 2.89%. The short-term COFIX is calculated using short-term funds with a three-month maturity.