Benchmark rate for banks' mortgage loans up for 2nd month in May

Visitors can be seen at a bank in Seoul, Thursday. 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 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.