[Edaily Reporter Kim Se-yeon ] Variable interest rates on mortgage loans will rise by up to 0.25 percentage points in just one day. This follows the COFIX (Cost of Funds Index)—which serves as the benchmark for variable rates—posting its largest increase in 3 years and 10 months. With the upper limit of variable mortgage rates at major commercial banks approaching 6.5% per annum, the interest burden on borrowers is set to increase significantly.
According to the financial industry on the 15th, NH Nonghyup Bank will raise the interest rate on its 6-month variable-rate mortgage loans by 0.19 percentage points starting on the 16th, from the current 4.49%–6.29% per annum to 4.68%–6.48% per annum. Woori Bank will raise the interest rate on its 6-month variable-rate mortgage loans—which are linked to the COFIX index based on new loan amounts—by 0.25 percentage points, from 4.75% to 5.95% per annum to 5.00% to 6.20% per annum. KB Kookmin Bank is also raising its mortgage interest rates based on the same criteria by 0.25 percentage points, from 4.39% to 5.79% per annum to 4.64% to 6.04% per annum.

This increase in loan interest rates follows a sharp rise in the COFIX rate within a single month. According to the Korea Federation of Banks on that day, the COFIX rate based on new loan volume stood at 3.43% in September, up 0.25 percentage points from the previous month (3.18%). This marks the largest increase in 3 years and 10 months, since November 2022. Among major commercial banks, KB Kookmin, Woori, and NH Nonghyup Bank use the COFIX rate as the benchmark for their variable-rate mortgage products.
The COFIX rate based on new loan volume has risen for four consecutive months, from 2.89% in April to 2.90% in May, 3.05% in June, and 3.18% in July. Although the upward trend paused in August when the rate remained at 3.18%—the same level as the previous month—it rose sharply again in September. Compared to September of last year (2.52%), it has risen by 0.91 percentage points over the past year.
If the loan interest rate rises by 0.25 percentage points, the annual interest burden for a borrower with a 400 million won loan increases by 1 million won—or an average of about 83,000 won per month—based on a simple calculation. However, the actual interest burden varies depending on the loan repayment method and outstanding balance. For existing variable-rate borrowers, the revised benchmark rate is reflected at the time of interest rate recalculation.

Other COFIX indices also rose across the board. According to the Korea Federation of Banks, the COFIX based on the September balance stood at 3.15%, up 0.10 percentage points from the previous month (3.05%). The COFIX based on the new balance rose by 0.08 percentage points, from 2.71% to 2.79%.
Consequently, bank mortgage interest rates linked to the new-balance COPIX will also rise. Woori Bank will raise its rates by 0.08 percentage points, from the current 4.48–5.68% per annum to 4.56–5.76% per annum, while Kookmin Bank will increase its rates by 0.08 percentage points, from 4.54–5.94% per annum to 4.62–6.02% per annum.
A banking industry official stated, “As the gap between fixed-rate and variable-rate mortgage interest rates widened this year, many borrowers opted for variable rates, so their financial burden is expected to increase.” The official added, “With the U.S. September Consumer Price Index (CPI) exceeding market expectations and international oil prices surging, the possibility of further interest rate hikes by the U.S. Federal Reserve (Fed) is gaining prominence. Consequently, domestic market interest rates and loan rates are also highly likely to rise further.”
In fact, the share of variable-rate mortgages among new mortgage loans has exceeded 60% every month since June. According to the Bank of Korea, the share of variable-rate mortgages based on new loan volume in August was 64.7%.
Meanwhile, the KOPIX index is calculated as a weighted average of the interest rates on funds raised by eight domestic banks. When interest rates on bank deposits, savings accounts, and bank bonds rise, the KOPIX also increases. In particular, the KOPIX based on new loan volume is relatively sensitive to fluctuations in market interest rates because it reflects the interest rates on funds newly raised during that month.