Record-low interest rate to push down mortgage rate
People seeking to take out loans stand in front of a teller at a branch of Shinhan Bank in Seoul, May 18. Korea Times fileBy Lee Kyung-min Borrowing costs for households including mortgages will decrease starting today following a record-low key base interest rate set by the central bank.The Bank of Korea (BOK) lowered its benchmark rate by a quarter percentage point to a record low of 0.50 percent, May 28 and after the decision, the central bank said the country's economy will contract 0.2 percent in 2020.The already low 2-percent borrowing rate could fall to as low as 1.85 percent, a level set by the government in 2019 to help borrowers switch their adjustable-rate loans to lower fixed-rate ones following a steady decline in the key base rate over the past few years.The adjustable rate that tracks the Cost of Funds Index (COFIX) will drop in stages, following decline in interest on savings account. The level of decrease depends on when the borrowing request was granted.The benchmark lending rate for mortgages, COFIX is widely used to determine lending rates here, and is measured by
