South Korean Banks' Mortgage Rate Benchmark Rises for Second Month
Quick Look
- South Korea's COFIX, a benchmark for bank mortgage rates, rose 0.01 percentage points to 2.90% in May, marking the second consecutive monthly increase.
- This rise occurs despite the Bank of Korea holding its key rate steady, amid expectations of a future hike.
AI-generated summary
Why It Matters
The benchmark rate for banks' mortgage rates in South Korea has increased for the second consecutive month in May. This follows expectations that the central bank might raise its key interest rate in the future.
SEOUL, June 15 (Yonhap) -- The benchmark rate for banks' mortgage rates increased for a second consecutive month in May amid expectations that the central bank may raise its key rate down the road, data showed Monday.
COFIX, or the Cost of Funds Index, a benchmark lending rate for mortgage loans, came to 2.90 percent last month, up 0.01 percentage point from the previous month, according to the data from the Korea Federation of Banks.
COFIX is calculated based on the funding costs of eight domestic banks in South Korea. They include Nonghyup Bank, Shinhan Bank, Woori Bank and Citibank Korea.
At its latest rate-setting meeting last month, the Bank of Korea (BOK) kept its benchmark interest rate unchanged at 2.5 percent, marking the eighth consecutive on-hold decision.
But the BOK said it would determine the timing of a future rate hike based on inflation trends as semiconductor-driven exports continue to support economic growth.
What to Watch
AI outlook — possibilities, not facts
Bank of Korea to raise key interest rate.
Possible · Medium term
Open Questions
- When will the Bank of Korea raise its key rate?
- What inflation trends will trigger a rate hike?
