July COFIX Rises 0.13% as Variable Mortgage Rates Increase for Fourth Month

The COFIX (Cost of Funds Index), which serves as the benchmark for variable-rate mortgage loans, has risen for the fourth consecutive month. As banks face higher funding costs, variable mortgage rates are expected to increase as well.

According to the Korea Federation of Banks on August 18, the COFIX for new transactions in July stands at 3.18%, up 0.13 percentage points from the previous month’s 3.05%.

This marks the highest level since December 2024 (3.22%) and reflects a continuous upward trend since April.

The balance-based COFIX also increased from 2.94% to 3.00%, a rise of 0.06 percentage points. The new balance-based COFIX rose from 2.54% to 2.65%, an increase of 0.11 percentage points.

COFIX represents the weighted average interest rate of funds raised by eight domestic banks. Since it reflects changes in interest rates for deposit products and financial bonds, an increase in COFIX typically leads to higher variable loan rates.

Starting August 19, banks will adjust their variable mortgage rates to reflect the new COFIX. KB Kookmin Bank's new variable mortgage rates will range from 4.38% to 5.90%, while Woori Bank's rates will be between 4.69% and 5.89%.