The criteria for the variable interest rate of bank mortgage loans, the Cost of Funds Index (COFIX), has been reported to have fallen for 10 consecutive months.
According to the Korea Federation of Banks on the 18th, the new COFIX for July based on the amount handled was recorded at 2.51%, down 0.03 percentage points from June (annual 2.54%). The balance-based COFIX also decreased from 3.07% to 3.00%, a drop of 0.07 percentage points.
COFIX is the weighted average interest rate of funds raised by eight domestic banks, reflecting changes in interest rates of deposit products such as savings and time deposits handled by banks. A decrease in COFIX means that banks have raised funds at a lower interest rate, while an increase signals the opposite.
Specifically, the new COFIX amount and balance-based COFIX are calculated based on the interest rates of various deposit products, including time deposits, regular savings, mutual installment savings, dwelling funds, certificates of deposit, repurchase agreements, commercial papers, and financial bonds (excluding subordinated and convertible bonds).
The 'new balance-based COFIX' introduced in June 2019 also fell from 2.63% to 2.59%, a decrease of 0.04 percentage points. The new balance COFIX includes interest rates from other deposits, borrowing funds, and payment funds.
Commercial banks are expected to reflect the COFIX rates released on the same day in the new variable interest rates for mortgage loans starting as early as the 19th. KB Kookmin Bank's new mortgage loan variable interest rate based on COFIX is set to decrease from the existing annual 3.93% to 5.33% to between 3.90% and 5.30%, a drop of 0.03 percentage points.