The Cost of Funds Index (COFIX), which serves as the benchmark for variable-rate mortgages at Korean banks, has fallen for the first time in five months.
According to the Korea Federation of Banks on the 19th, COFIX based on new loans in January was recorded at 2.77%, down 0.12 percentage points from the previous month's 2.89%. The index had risen for four consecutive months since September last year before turning downward for the first time in five months. COFIX based on outstanding balances rose 0.01 percentage points from 2.84% to 2.85%.
COFIX represents the weighted average interest rate on funds raised by eight domestic banks. When COFIX falls, it means banks can secure funds at lower interest costs; when it rises, the opposite applies.
Commercial banks will begin applying the revised COFIX rate to new variable-rate mortgages starting on the 20th. KB Kookmin Bank's six-month variable mortgage rate based on new loan COFIX will decrease by 0.12 percentage points from 4.22%-5.62% to 4.10%-5.50%. Woori Bank's six-month variable mortgage rate based on new loan COFIX will also drop from 4.41%-5.61% to 4.29%-5.49%.