Seoul: The average lending rate of major banks in South Korea decreased for the seventh consecutive month in April, reaching its lowest level in nearly three years, data revealed on Thursday.

According to Yonhap News Agency, COFIX, or the Cost of Funds Index, which serves as a benchmark lending rate for mortgage loans, was recorded at 2.70 percent last month. This represents a decrease of 0.14 percentage points from the previous month. The April rate is the lowest observed since June 2022, when the comparable figure stood at 2.38 percent.

COFIX is derived from the funding costs of eight domestic banks in South Korea, including Nonghyup Bank, Shinhan Bank, Woori Bank, and Citibank Korea. In April, the central bank maintained its benchmark interest rate at 2.75 percent to support the unstable currency and ensure financial stability, while adopting a cautious stance amid heightened uncertainty from the Donald Trump administration’s sweeping tariff campaign.

This decision follows a quarter-percentage-point rate cut during the previous meeting in February, marking the third reduction since October 2024, when the Bank of Korea began its monetary easing cycle for the first time since August 2021. Household loans extended by South Korean banks increased significantly in April, driven by a rise in housing transactions following state deregulatory measures.

Banks’ outstanding household loans rose by 4.8 trillion won (US$3.43 billion) from the previous month in April, marking the third consecutive monthly increase and a sharp acceleration from the 1.6 trillion-won increase observed in March.