Cofix (Cost of Funds Index), a benchmark for banks’ variable-rate mortgage loans, rose for a fourth straight month. Variable-rate mortgage lending rates are expected to rise further.

The Korea Federation of Banks said on Aug. 18 that the July Cofix based on new loans stood at 3.18 percent a year, up 0.13 percentage points from 3.05 percent the previous month.

The new-loan Cofix has risen for four consecutive months since April, marking its highest level in 1 year and 7 months since 3.22 percent in December 2024.

The balance-based Cofix also rose 0.06 percentage points to 3.00 percent a year from 2.94 percent. The new-balance-based Cofix climbed 0.11 percentage points to 2.65 percent a year from 2.54 percent.

Cofix is the weighted average interest rate on funds raised by eight South Korean banks, reflecting changes in rates on major bank deposit products such as time deposits, installment savings and bank debentures. When Cofix rises, banks’ funding costs increase, lifting variable loan rates tied to the benchmark.

Major commercial banks are expected to reflect the newly announced Cofix in new variable-rate mortgage loans as early as Aug. 19.