COFIX Rises After a Month, April Rate Up 0.08%

Banking sector variable mortgage rates, determined by the COFIX (Cost of Funds Index), have risen after a month. The Korea Federation of Banks reported on May 15 that the new COFIX for April was 2.89%, an increase of 0.08 percentage points from March's rate of 2.81%.

The balance-based COFIX also rose from 2.85% to 2.87%, an increase of 0.02 percentage points. COFIX represents the weighted average interest rate of funds raised by eight domestic banks. An increase in COFIX indicates that banks are paying higher interest rates to secure funds.

The new balance-based COFIX, introduced in June 2019, increased from 2.45% to 2.49%. This new index includes rates for other deposits, borrowings, and transaction funds.

With COFIX rising after a month, mortgage rates are expected to increase as well. Amid stricter household loan regulations making it difficult to obtain mortgages, the rising interest rates are likely to heighten the financial burden for actual borrowers.