The reference rate for the variable interest rate on bank home equity loans (dwellings) has fallen to the annual range of 2% as the COFIX (cost of funds index) has declined for five consecutive months.
The Korea Federation of Banks noted on the 17th that the COFIX for the new handling amount in February was recorded at 2.97%, which is a decrease of 0.11 percentage points from January (3.08%). This marks the first time the COFIX for new handling amounts has entered the 2% range since August 2022 (2.96%), a gap of 2 years and 6 months. The COFIX has been in decline for five consecutive months since last October.
The COFIX is the weighted average interest rate of funds raised by eight domestic banks. A decline in the COFIX indicates that banks secured funds at lower interest.
The balance-based COFIX also decreased by 0.06 percentage points from 3.42% to 3.36%.
The 'new balance-based COFIX' introduced in June 2019 also fell from 2.92% to 2.89%, a decrease of 0.03 percentage points. The new balance COFIX includes interest rates from other deposits, borrowing funds, and settlement funds. Commercial banks are expected to reflect the COFIX rate released on this day in the new variable interest rates for home equity loans starting from the 18th.