Mortgage Rates Poised to Rise as COFIX Continues Upward Trend in May

The COFIX (Cost of Funds Index), an indicator reflecting banks' borrowing costs, continued its upward trend in May. The COFIX for new loans in May stood at 2.90% per annum, a 0.01 percentage point increase from the previous month. The COFIX had shown a rising trend for two consecutive months, increasing from 2.81% in March to 2.89% in April.

The COFIX based on outstanding balances was recorded at 2.89%, up 0.02 percentage points from the previous month. The COFIX based on new outstanding balances also recorded 2.50%, an increase of 0.01 percentage points from a month earlier.

The COFIX is calculated by a weighted average of the funding rates of eight banks, including Nonghyup, Shinhan, Woori, SC First, Hana, Industrial, Kookmin, and Citibank Korea. Fluctuations in interest rates for deposit products such as savings accounts, time deposits, and bank bonds are reflected in the COFIX.