Last month, the COFIX (Cost of Funds Index), which serves as the benchmark for variable-rate mortgage loans, remained unchanged from the previous month.
According to the Bankers Association on September 15, the COFIX for new transactions in August was 3.18%, the same as in July. The COFIX for new transactions had risen for four consecutive months from April to July, reaching its highest level in 1 year and 7 months at 3.22% in December 2024, but the upward trend halted in August.
In contrast, the COFIX based on outstanding balances continued to rise. By the end of August, the outstanding balance COFIX increased by 0.05 percentage points to 3.05%, the highest level since June 2022 (3.07%).
COFIX represents the weighted average interest rate of funds raised by eight domestic banks (NH Nonghyup, Shinhan, Woori, SC First Bank, Hana, IBK, KB Kookmin, and Citibank Korea). It reflects changes in the interest rates of deposit products and bank bonds. A decrease in COFIX indicates lower funding costs for banks, while an increase suggests the opposite.
The COFIX for new transactions and outstanding balances includes regular deposits, savings accounts, mutual savings, housing savings, certificates of deposit, repurchase agreements, commercial paper, and financial bonds (excluding subordinated and convertible bonds).
The new outstanding balance COFIX rose from 2.65% to 2.71%, an increase of 0.06 percentage points. This new outstanding balance COFIX also reflects the interest rates of other deposits, borrowings, and settlement funds.
Major banks are expected to reflect the COFIX rate announced today in the new variable-rate mortgage loans starting as early as September 16.
* This article has been translated by AI.
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