The Korea Federation of Banks said Tuesday that the March COFIX based on new loan issuance came to 2.81%, down 0.01 percentage point from the previous month.
The index had dropped in January for the first time in five months, falling 0.12 percentage point, then turned higher in February before easing again in March.
Over the same period, the COFIX based on outstanding balances held steady at 2.85%, while the “new outstanding balance” COFIX slipped 0.02 percentage point to 2.45%.
COFIX is the weighted average interest rate of funds raised by eight domestic banks. It moves up or down as rates on major funding products such as deposits and bank bonds rise or fall.
The federation said the new-loan COFIX reflects market-rate changes more quickly because it is calculated using funds newly raised during the month. It advised borrowers seeking COFIX-linked loans to fully understand how market-rate shifts affect the index before choosing a loan product.
Commercial banks are set to apply the newly announced COFIX to variable rates on new mortgage loans starting Wednesday.
At KB Kookmin Bank, the six-month variable mortgage rate tied to the new-loan COFIX will fall 0.01 percentage point to 3.98% to 5.38% from 3.99% to 5.39%. Under the same benchmark, the rate on jeonse deposit loans backed by the Korea Housing Finance Corp. will also edge down to 3.74% to 5.14% from 3.75% to 5.15%.
At Woori Bank, the six-month variable mortgage rate tied to the new-loan COFIX will drop to 3.79% to 5.39% from 3.80% to 5.40%.
* This article has been translated by AI.
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