Variable lending rates for mortgage loan on dwellings in the banking sector are expected to rise slightly.
According to the Korea Federation of Banks on the 15th, the Cost of Funds Index (COFIX) based on new handling amounts in May was compiled at an annual 2.90%, up 0.01 percentage point from the previous month (annual 2.89%). This follows an increase of 0.08 percentage point in March, marking two consecutive months of gains. The COFIX based on outstanding balances also showed an annual 2.87%, up 0.02 percentage point.
COFIX is the weighted average rate of funds raised by eight domestic banks. When COFIX rises, it means banks secure money by paying more interest.
As COFIX has risen for two consecutive months, banks' variable rates for new mortgage loan are also expected to go up. The "new outstanding-balance-based COFIX" rose from an annual 2.49% to 2.50%.