Mortgage Loan Rates to Rise Again as COFIX Increases by 0.08%p

2.89% Per Annum Based on New Loan Issuance
Rising for Four Consecutive Months

The Cost of Funds Index (COFIX), which serves as the benchmark for variable-rate mortgage loans at banks, has risen for four consecutive months.

According to the Korea Federation of Banks on January 15, the COFIX based on new loan issuance in December of last year was recorded at 2.89%, up 0.08 percentage points from November. The balance-based COFIX also increased by 0.01 percentage points to 2.84%.

COFIX is the weighted average interest rate of funds raised by eight domestic banks. It reflects increases or decreases in deposit products such as savings deposits and bank bonds that banks actually handle, resulting in corresponding rises or falls in the index.

In particular, the COFIX based on new loan issuance is calculated from funds newly raised during the month, allowing it to reflect market interest rate changes more quickly.

With the rise in COFIX, major commercial banks are expected to adjust their mortgage loan rates as early as January 16.

The new balance-based COFIX, which was introduced in June 2019, fell by 0.01 percentage points from 2.48% to 2.47%. The new balance-based COFIX also includes interest rates on other deposits, borrowings, and settlement funds.

The short-term COFIX, based on posted rates over the past four weeks, ranged from 2.80% to 2.96%. The short-term COFIX is calculated based on short-term funds with a three-month maturity.