Variable mortgage rates to rise again… October COFIX up 0.05%p. Yonhap News

The COFIX (Cost of Funds Index), the benchmark for variable-rate housing loans at commercial banks, has risen for two consecutive months.

According to the Korea Federation of Banks on the 17th, the COFIX for newly issued loans in October stood at 2.57%, an increase of 0.05 percentage points (p) from 2.52% in September.

However, the COFIX for outstanding loans decreased by 0.05%p, from 2.89% to 2.84%.

COFIX trends. Korea Federation of Banks 

COFIX is the weighted average interest rate of funds procured by eight domestic banks, reflecting changes in the interest rates of deposit products such as savings accounts, time deposits, and bank bonds that the banks actually handle.

A decrease in COFIX means that banks can secure funds at a lower interest rate, while an increase in COFIX signifies the opposite.

Specifically, the newly issued COFIX and the outstanding loan COFIX are calculated based on the interest rates of deposit products including time deposits, installment savings, mutual savings, housing savings, certificates of deposit, repurchase agreements, commercial paper, and financial bonds (excluding subordinated bonds and convertible bonds).

The 'New Outstanding COFIX,' newly introduced in June 2019, also fell by 0.01%p from 2.49% to 2.48%. The new outstanding COFIX also includes interest rates for other deposits, borrowings, and settlement funds.

Commercial banks are expected to reflect the COFIX rates announced today in their new variable-rate housing loan interest rates as early as the 18th.

Yonhap News