The COFIX (funding cost index), which is the basis for the interest rate of variable housing mortgage loans (principal mortgage loans), was more than 4%, breaking the record again. Compared to the previous month, which showed a record increase, the scale of the increase decreased slightly, but the momentum was still the same. As the Federal Reserve System (Fed), the central bank of the United States, and the Bank of Korea adjust the rate of interest rates, the rapidly rising interest rate is expected to slow down.
On the 15th, the Korean Bank Federation announced that based on the new November handling amount, the COFIX increased at 4.34%, up 0.36 percentage points (P) from the previous month. This is the first time COFIX has exceeded 4%.
COFIX is the weighted average interest rate of funds charged by eight domestic banks, including NH Nonghyup, Shinhan, Woori, SC Jeil, Hana, IBK, KB Kookmin, and Citi Korea. When interest rates on deposits and installment deposits and bank debentures actually traded by banks increase or decrease, they rise or fall to reflect them.
After recording 3.98% in October, COFIX rises in the short term △4.10% on November 23 △4.10% on November 30 △4.17% on December 7 △4.30% on December 14th. However, the rate of increase slowed slightly compared to the previous month. Previously, based on the new COFIX, it rose by 0.40% P in July and 0.58% P in October, respectively, renewing the record level of increase.
The rise of the COFIX was also influenced by the US Federal Reserve and the increasing interest rates of the Bank of Korea. Previously, the Bank of Korea has been raising the base rate one after the other since August last year in line with the US Fed rate hike. The current base rate in Korea is currently 3.25% after a 0.25% percent increase from the previous level on the 24th of last month.
Cofix based on balance (at the end of November) was 3.19%, up 0.34% on the previous month, and Cofix based on new balance (at the end of November) was 2.65%, up 0.29% on the previous month .
The financial sector is analyzing that although the upward trend of the COFIX is still slowing down, the possibility of a sudden rate rise is not high. At the moment, the financial authorities are putting the brakes on rising interest rates on deposits and savings deposits in banks. The US Federal Reserve also took four consecutive big steps (an increase of 0.75 percentage points at a time) in June, July, September, and November, but the increase eased slightly with a large step (an increase of 0.5 percentage points at a time ) on this day.
As interest rate rises slowed somewhat, end user heads also became complicated. This is because a fixed fixed rate is advantageous during an interest rate hike, but a floating rate is advantageous during a future period of stabilization or decline. As of this day, the interest rates of the four major banks (KB Kookmin Bank, Shinhan Bank, Hana Bank, and Woori Bank) based on new handling amounts were 5.21 to 7.36% per annum.
An official from the bank said, “Recently, the interest rates for loans, including the principal loans, have been eased somewhat due to the recommendation of the financial authorities, but it is still too early to be eased. “
Source: Federation of Banks of Korea
Reporter Park Yun-ho yuno@etnews.com
