{"content_id":"9sx4qgdylt","slug":"base-rate-loan-rate-reset-timing","locale":"en","schema_type":"Article","category":"knowledge_base","category_name":"Knowledge Base","title":"Base Rate Hikes: When and How Loan Rates Change","summary":"A base rate hike does not apply immediately to existing loans. The actual timing and size of the change depend on the benchmark rate, the 3-, 6-, or 12-month reset cycle, whether the rate is fixed, and preferential terms.","sponsorship_disclosure":null,"affiliate_disclosure":null,"commerce_disclosure":null,"author":{"name":"Injoys Editorial Team","url":"https://injoys.com/ko/about"},"key_points":["Loan rates are set by adding a spread to the benchmark rate and subtracting preferential rate discounts.","Rates on variable-rate loans change according to the 3-, 6-, or 12-month reset cycle specified in the contract.","Hybrid loans are affected by the benchmark rate in effect after the fixed-rate period ends.","In principle, fully fixed-rate loans do not reflect market rate changes until the agreed maturity date.","To determine why a rate changed, check the contractual benchmark and preferential terms before the base rate."],"content_markdown":"An increase in the base rate does not mean that existing loan rates will rise immediately. Variable rates change according to benchmarks such as COFIX and bank bond yields and their 3-, 6-, or 12-month repricing cycles, while fully fixed rates are generally maintained until maturity.\n\nReference point: Check the latest figures in the Bank of Korea’s “Base Rate History” and the Korea Federation of Banks Consumer Portal’s “COFIX Disclosures”\n\n## Loan Rate Formula\n\nLoan rates are determined by combining a benchmark rate with the contract terms. The basic structure can be expressed using the formula below. The base rate may not enter this formula directly. Instead, it indirectly affects the benchmark rate.\n\n**Loan rate = benchmark rate + spread - preferential rate**\n\n| Component | Meaning | Factors affecting the rate |\n|---|---|---|\n| Benchmark rate | A reference reflecting the bank’s funding costs | COFIX, bank bonds, CDs, KORIBOR, etc. |\n| Spread | A rate reflecting risks and costs specific to the borrower and product | Creditworthiness, collateral, loan type, operating costs, etc. |\n| Preferential rate | A discount applied when transaction requirements are met | Salary deposits, card spending, automatic transfers, etc. |\n\nEven if the benchmark rate falls, the final rate may decline by less. This is because an increase in the spread can offset the decline in the benchmark. The applicable rate may also rise if preferential terms are lost. Therefore, it is difficult to predict interest costs based only on the direction of the base rate.\n\n## How the Base Rate Is Transmitted to Loans\n\nChanges in the base rate are transmitted to loans through financial markets. A Bank of Korea decision does not apply to every loan the next day. Market rates and product-specific benchmarks move first. They are then reflected in existing loans on the contractually specified repricing date.\n\n1. The Bank of Korea changes the base rate.\n2. Market rates such as the call rate, CDs, and bank bond yields respond.\n3. Banks’ funding costs change.\n4. Loan benchmarks such as COFIX or bank bond yields change.\n5. The new rate is applied on the repricing date specified in the contract.\n\nCOFIX is published by the Korea Federation of Banks at 3 p.m. on the 15th of each month. Bank bond yields are formed daily in the bond market. The actual application date must follow the terms of each loan agreement.\n\nOfficial definitions and the base rate history are available from the Bank of Korea. The latest COFIX is available from the Korea Federation of Banks Consumer Portal. The loan agreement and the bank’s guidance govern which benchmark applies to each product.\n\n## Comparison of Rate Adjustments by Loan Type\n\nDifferent types of loans track different benchmarks. Even loans taken out on the same day may experience different rate movements. The information below describes the general structure. The exact terms must be checked in the contract.\n\n| Loan type | Commonly used benchmark | How it is reflected | When to check |\n|---|---|---|---|\n| Variable-rate mortgage | COFIX | Latest contractually specified benchmark applied at repricing | Every 3, 6, or 12 months |\n| Hybrid-rate mortgage | 5-year bank bond yield, etc. | Converts to a variable rate after the fixed-rate period | End date of the fixed-rate period |\n| Fully fixed-rate loan | Bank bond yield at origination, etc. | Contracted rate generally maintained until maturity | Whether preferential terms have changed |\n| Unsecured personal loan | 6-month or 1-year bank bond yield, CD, KORIBOR, etc. | Changes in short-term benchmarks reflected at repricing | Contractual adjustment cycle |\n| Jeonse loan | COFIX or 6-month bank bond yield, etc. | Reflected differently depending on the bank and product | Benchmark and cycle specified in the agreement |\n\nA loan priced using bank bond yields is not necessarily variable-rate. Bank bond yields are also used to calculate fixed rates when a loan is originated. Whether the rate is recalculated after origination is a separate issue. You must also review the rate application method in the contract.\n\n## Summary by Contract Terms\n\nWhether your current loan rate will rise can be determined by examining the rate type and repricing date. Checking only whether the base rate has increased is not enough. Find the item below that applies to your contract.\n\n| Contract terms | Expected impact |\n|---|---|\n| Variable-rate with an approaching repricing date | Recent changes in the applicable benchmark may soon be reflected |\n| Variable-rate with substantial time remaining until repricing | Existing rate may be maintained until the repricing date |\n| Hybrid-rate with time remaining in the fixed-rate period | Benchmark changes are generally not reflected during the fixed-rate period |\n| Hybrid-rate with an approaching conversion date | Rate may change based on the benchmark at the time of conversion |\n| Fully fixed-rate with preferential terms maintained | Market-rate increases are generally not reflected in the contracted rate |\n| Preferential terms are not met | Final rate may rise regardless of the benchmark |\n| Contract allows the spread to be repriced | Rate may change by a different amount from the benchmark |\n\nDo not rely only on a product being labeled “fixed-rate.” It may be a hybrid-rate product fixed only for a certain period. Check the fixed-rate end date and the benchmark applied afterward. Also review the requirements for maintaining the preferential rate.\n\n## Calculation Example: Change in a 6-Month Variable Rate\n\nA 6-month variable rate reapplies the contractual benchmark every six months. Let the change in the benchmark be Δ%p. If the spread and preferential rate remain the same, the calculation is simple. The new loan rate changes by Δ%p from the previous rate.\n\n**Rate before repricing = existing benchmark + spread - preferential rate**\n\n**Rate after repricing = existing benchmark + Δ%p + spread - preferential rate**\n\n**Rate change = Δ%p**\n\nAssuming the outstanding principal remains the same, the change in monthly interest can also be calculated. Δ is measured in percentage points, not percent. Calculating the monthly payment for an equal principal-and-interest repayment loan requires a separate amortization formula.\n\n**Change in monthly interest ≈ outstanding principal × (Δ ÷ 100) ÷ 12 months**\n\nThis calculation assumes that the spread and preferential rate remain unchanged. If the preferential terms change, the size of the change will also differ. The actual amount billed should be checked against the bank’s repayment schedule.\n\n## Contract Terms to Check Before the Base Rate\n\nThe most accurate way to predict your loan’s next rate is to review the loan agreement. In particular, an item labeled “base rate” may mean something different from the Bank of Korea’s rate. It often refers to a loan benchmark designated by the bank. Review the contract terms in the following order.\n\n1. Check whether the rate application method is variable.\n2. If it is a hybrid rate, find the end date of the fixed-rate period.\n3. Confirm the exact name of the applicable benchmark.\n4. If it is COFIX, confirm the specific type.\n5. Find the rate repricing cycle and the next adjustment date.\n6. Check the conditions under which the spread may change.\n7. Review preferential terms such as salary deposits.\n8. Compare each item in the rate notices before and after the change.\n\nCOFIX has several different calculation types. Even if their names are similar, their figures and movements may not be the same. You must look up the exact COFIX type stated in the contract. Comparing it with the disclosed figure for another type can lead to an incorrect conclusion.\n\n## Common Mistakes\n\nWhen interpreting changes in loan rates, it is easy to confuse the base rate with the benchmark rate. You should also not attribute a rate increase to a single factor without verification. Compare the previous and new values for each item in the notice.\n\n| Common assumption | What to check in practice |\n|---|---|\n| If the base rate rises, interest rises the next day | The existing rate may remain in place until the repricing date |\n| If the base rate is held steady, the loan rate also stays the same | Bank bond yields, COFIX, and spreads may move separately |\n| A fixed rate remains the same in every case | Check whether it is a hybrid rate and whether preferential terms have been lost |\n| If COFIX falls, the loan rate falls by the same amount | Changes in the spread and preferential rate must also be considered |\n| All jeonse loans use the same benchmark | COFIX or bank bond yields may be used depending on the bank and product |\n| A bank bond yield reported in the news applies immediately | It is reflected only when the contractual benchmark and repricing date align |\n\nA reduction in the base rate is transmitted according to the same principles. However, the market may have anticipated the reduction in advance. In that case, bank bond yields may move before the decision. The base rate and loan rates may temporarily move in different directions.\n\n## How to Check the Latest Base Rate and COFIX\n\nThe latest figures should be checked together with their official publication dates. An undated statement such as “increased for two consecutive months” cannot be assumed to describe the current situation. Check the decision date in the Bank of Korea’s base rate history. Check the COFIX for the relevant month through the Korea Federation of Banks.\n\n- Bank of Korea: Base rate history and change dates under monetary policy\n- Korea Federation of Banks Consumer Portal: Monthly COFIX figures and types\n- Loan agreement: Applicable benchmark and repricing cycle\n- Bank rate notice: Changes to spreads and preferential rates\n\nThe reference date for a market disclosure may differ from that of your contract. Do not assume that the latest published figure applies immediately. Check which published figure will be used on the next repricing date.\n\n## Frequently Asked Questions\n\n### If the base rate rises, does a variable rate rise by the same amount?\n\nIt does not always rise by the same amount. The movement in the contractual benchmark is reflected first. Changes in the spread and preferential rate also affect the final rate.\n\n### Are existing fixed-rate loans also affected?\n\nFor fully fixed-rate loans, the contracted rate is generally maintained until maturity. However, a hybrid-rate loan converts to a variable rate after the fixed-rate period. You should also check whether preferential terms have been lost.\n\n### Does the loan rate change immediately on the COFIX publication date?\n\nExisting loans generally change on the contractually specified repricing date. The publication date and actual application date may differ. Check the rate adjustment date in the contract.\n\n### Can the loan rate rise even if the base rate is held steady?\n\nYes. Bank bond yields and COFIX move according to market conditions. An increase in the spread or a reduction in the preferential rate may also be the cause.\n\n### Where can I find my loan’s benchmark?\n\nCheck the rate application section of the loan agreement. It may also be displayed on the loan details screen in the bank’s app. If it is difficult to find, ask the bank for the name of the benchmark and the next repricing date.","content_html":"\u003cp\u003eAn increase in the base rate does not mean that existing loan rates will rise immediately. Variable rates change according to benchmarks such as COFIX and bank bond yields and their 3-, 6-, or 12-month repricing cycles, while fully fixed rates are generally maintained until maturity.\u003c/p\u003e\n\u003cp\u003eReference point: Check the latest figures in the Bank of Korea’s “Base Rate History” and the Korea Federation of Banks Consumer Portal’s “COFIX Disclosures”\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#loan-rate-formula\" class=\"anchor\" id=\"loan-rate-formula\"\u003e\u003c/a\u003eLoan Rate Formula\u003c/h2\u003e\n\u003cp\u003eLoan rates are determined by combining a benchmark rate with the contract terms. The basic structure can be expressed using the formula below. The base rate may not enter this formula directly. Instead, it indirectly affects the benchmark rate.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eLoan rate = benchmark rate + spread - preferential rate\u003c/strong\u003e\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eComponent\u003c/th\u003e\n\u003cth\u003eMeaning\u003c/th\u003e\n\u003cth\u003eFactors affecting the rate\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Component\"\u003eBenchmark rate\u003c/td\u003e\n\u003ctd data-label=\"Meaning\"\u003eA reference reflecting the bank’s funding costs\u003c/td\u003e\n\u003ctd data-label=\"Factors affecting the rate\"\u003eCOFIX, bank bonds, CDs, KORIBOR, etc.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Component\"\u003eSpread\u003c/td\u003e\n\u003ctd data-label=\"Meaning\"\u003eA rate reflecting risks and costs specific to the borrower and product\u003c/td\u003e\n\u003ctd data-label=\"Factors affecting the rate\"\u003eCreditworthiness, collateral, loan type, operating costs, etc.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Component\"\u003ePreferential rate\u003c/td\u003e\n\u003ctd data-label=\"Meaning\"\u003eA discount applied when transaction requirements are met\u003c/td\u003e\n\u003ctd data-label=\"Factors affecting the rate\"\u003eSalary deposits, card spending, automatic transfers, etc.\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eEven if the benchmark rate falls, the final rate may decline by less. This is because an increase in the spread can offset the decline in the benchmark. The applicable rate may also rise if preferential terms are lost. Therefore, it is difficult to predict interest costs based only on the direction of the base rate.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#how-the-base-rate-is-transmitted-to-loans\" class=\"anchor\" id=\"how-the-base-rate-is-transmitted-to-loans\"\u003e\u003c/a\u003eHow the Base Rate Is Transmitted to Loans\u003c/h2\u003e\n\u003cp\u003eChanges in the base rate are transmitted to loans through financial markets. A Bank of Korea decision does not apply to every loan the next day. Market rates and product-specific benchmarks move first. They are then reflected in existing loans on the contractually specified repricing date.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eThe Bank of Korea changes the base rate.\u003c/li\u003e\n\u003cli\u003eMarket rates such as the call rate, CDs, and bank bond yields respond.\u003c/li\u003e\n\u003cli\u003eBanks’ funding costs change.\u003c/li\u003e\n\u003cli\u003eLoan benchmarks such as COFIX or bank bond yields change.\u003c/li\u003e\n\u003cli\u003eThe new rate is applied on the repricing date specified in the contract.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eCOFIX is published by the Korea Federation of Banks at 3 p.m. on the 15th of each month. Bank bond yields are formed daily in the bond market. The actual application date must follow the terms of each loan agreement.\u003c/p\u003e\n\u003cp\u003eOfficial definitions and the base rate history are available from the Bank of Korea. The latest COFIX is available from the Korea Federation of Banks Consumer Portal. The loan agreement and the bank’s guidance govern which benchmark applies to each product.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#comparison-of-rate-adjustments-by-loan-type\" class=\"anchor\" id=\"comparison-of-rate-adjustments-by-loan-type\"\u003e\u003c/a\u003eComparison of Rate Adjustments by Loan Type\u003c/h2\u003e\n\u003cp\u003eDifferent types of loans track different benchmarks. Even loans taken out on the same day may experience different rate movements. The information below describes the general structure. The exact terms must be checked in the contract.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eLoan type\u003c/th\u003e\n\u003cth\u003eCommonly used benchmark\u003c/th\u003e\n\u003cth\u003eHow it is reflected\u003c/th\u003e\n\u003cth\u003eWhen to check\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Loan type\"\u003eVariable-rate mortgage\u003c/td\u003e\n\u003ctd data-label=\"Commonly used benchmark\"\u003eCOFIX\u003c/td\u003e\n\u003ctd data-label=\"How it is reflected\"\u003eLatest contractually specified benchmark applied at repricing\u003c/td\u003e\n\u003ctd data-label=\"When to check\"\u003eEvery 3, 6, or 12 months\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Loan type\"\u003eHybrid-rate mortgage\u003c/td\u003e\n\u003ctd data-label=\"Commonly used benchmark\"\u003e5-year bank bond yield, etc.\u003c/td\u003e\n\u003ctd data-label=\"How it is reflected\"\u003eConverts to a variable rate after the fixed-rate period\u003c/td\u003e\n\u003ctd data-label=\"When to check\"\u003eEnd date of the fixed-rate period\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Loan type\"\u003eFully fixed-rate loan\u003c/td\u003e\n\u003ctd data-label=\"Commonly used benchmark\"\u003eBank bond yield at origination, etc.\u003c/td\u003e\n\u003ctd data-label=\"How it is reflected\"\u003eContracted rate generally maintained until maturity\u003c/td\u003e\n\u003ctd data-label=\"When to check\"\u003eWhether preferential terms have changed\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Loan type\"\u003eUnsecured personal loan\u003c/td\u003e\n\u003ctd data-label=\"Commonly used benchmark\"\u003e6-month or 1-year bank bond yield, CD, KORIBOR, etc.\u003c/td\u003e\n\u003ctd data-label=\"How it is reflected\"\u003eChanges in short-term benchmarks reflected at repricing\u003c/td\u003e\n\u003ctd data-label=\"When to check\"\u003eContractual adjustment cycle\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Loan type\"\u003eJeonse loan\u003c/td\u003e\n\u003ctd data-label=\"Commonly used benchmark\"\u003eCOFIX or 6-month bank bond yield, etc.\u003c/td\u003e\n\u003ctd data-label=\"How it is reflected\"\u003eReflected differently depending on the bank and product\u003c/td\u003e\n\u003ctd data-label=\"When to check\"\u003eBenchmark and cycle specified in the agreement\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eA loan priced using bank bond yields is not necessarily variable-rate. Bank bond yields are also used to calculate fixed rates when a loan is originated. Whether the rate is recalculated after origination is a separate issue. You must also review the rate application method in the contract.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#summary-by-contract-terms\" class=\"anchor\" id=\"summary-by-contract-terms\"\u003e\u003c/a\u003eSummary by Contract Terms\u003c/h2\u003e\n\u003cp\u003eWhether your current loan rate will rise can be determined by examining the rate type and repricing date. Checking only whether the base rate has increased is not enough. Find the item below that applies to your contract.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eContract terms\u003c/th\u003e\n\u003cth\u003eExpected impact\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003eVariable-rate with an approaching repricing date\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eRecent changes in the applicable benchmark may soon be reflected\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003eVariable-rate with substantial time remaining until repricing\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eExisting rate may be maintained until the repricing date\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003eHybrid-rate with time remaining in the fixed-rate period\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eBenchmark changes are generally not reflected during the fixed-rate period\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003eHybrid-rate with an approaching conversion date\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eRate may change based on the benchmark at the time of conversion\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003eFully fixed-rate with preferential terms maintained\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eMarket-rate increases are generally not reflected in the contracted rate\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003ePreferential terms are not met\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eFinal rate may rise regardless of the benchmark\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Contract terms\"\u003eContract allows the spread to be repriced\u003c/td\u003e\n\u003ctd data-label=\"Expected impact\"\u003eRate may change by a different amount from the benchmark\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eDo not rely only on a product being labeled “fixed-rate.” It may be a hybrid-rate product fixed only for a certain period. Check the fixed-rate end date and the benchmark applied afterward. Also review the requirements for maintaining the preferential rate.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#calculation-example-change-in-a-6-month-variable-rate\" class=\"anchor\" id=\"calculation-example-change-in-a-6-month-variable-rate\"\u003e\u003c/a\u003eCalculation Example: Change in a 6-Month Variable Rate\u003c/h2\u003e\n\u003cp\u003eA 6-month variable rate reapplies the contractual benchmark every six months. Let the change in the benchmark be Δ%p. If the spread and preferential rate remain the same, the calculation is simple. The new loan rate changes by Δ%p from the previous rate.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRate before repricing = existing benchmark + spread - preferential rate\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRate after repricing = existing benchmark + Δ%p + spread - preferential rate\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRate change = Δ%p\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eAssuming the outstanding principal remains the same, the change in monthly interest can also be calculated. Δ is measured in percentage points, not percent. Calculating the monthly payment for an equal principal-and-interest repayment loan requires a separate amortization formula.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eChange in monthly interest ≈ outstanding principal × (Δ ÷ 100) ÷ 12 months\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis calculation assumes that the spread and preferential rate remain unchanged. If the preferential terms change, the size of the change will also differ. The actual amount billed should be checked against the bank’s repayment schedule.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#contract-terms-to-check-before-the-base-rate\" class=\"anchor\" id=\"contract-terms-to-check-before-the-base-rate\"\u003e\u003c/a\u003eContract Terms to Check Before the Base Rate\u003c/h2\u003e\n\u003cp\u003eThe most accurate way to predict your loan’s next rate is to review the loan agreement. In particular, an item labeled “base rate” may mean something different from the Bank of Korea’s rate. It often refers to a loan benchmark designated by the bank. Review the contract terms in the following order.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eCheck whether the rate application method is variable.\u003c/li\u003e\n\u003cli\u003eIf it is a hybrid rate, find the end date of the fixed-rate period.\u003c/li\u003e\n\u003cli\u003eConfirm the exact name of the applicable benchmark.\u003c/li\u003e\n\u003cli\u003eIf it is COFIX, confirm the specific type.\u003c/li\u003e\n\u003cli\u003eFind the rate repricing cycle and the next adjustment date.\u003c/li\u003e\n\u003cli\u003eCheck the conditions under which the spread may change.\u003c/li\u003e\n\u003cli\u003eReview preferential terms such as salary deposits.\u003c/li\u003e\n\u003cli\u003eCompare each item in the rate notices before and after the change.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eCOFIX has several different calculation types. Even if their names are similar, their figures and movements may not be the same. You must look up the exact COFIX type stated in the contract. Comparing it with the disclosed figure for another type can lead to an incorrect conclusion.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#common-mistakes\" class=\"anchor\" id=\"common-mistakes\"\u003e\u003c/a\u003eCommon Mistakes\u003c/h2\u003e\n\u003cp\u003eWhen interpreting changes in loan rates, it is easy to confuse the base rate with the benchmark rate. You should also not attribute a rate increase to a single factor without verification. Compare the previous and new values for each item in the notice.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCommon assumption\u003c/th\u003e\n\u003cth\u003eWhat to check in practice\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common assumption\"\u003eIf the base rate rises, interest rises the next day\u003c/td\u003e\n\u003ctd data-label=\"What to check in practice\"\u003eThe existing rate may remain in place until the repricing date\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common assumption\"\u003eIf the base rate is held steady, the loan rate also stays the same\u003c/td\u003e\n\u003ctd data-label=\"What to check in practice\"\u003eBank bond yields, COFIX, and spreads may move separately\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common assumption\"\u003eA fixed rate remains the same in every case\u003c/td\u003e\n\u003ctd data-label=\"What to check in practice\"\u003eCheck whether it is a hybrid rate and whether preferential terms have been lost\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common assumption\"\u003eIf COFIX falls, the loan rate falls by the same amount\u003c/td\u003e\n\u003ctd data-label=\"What to check in practice\"\u003eChanges in the spread and preferential rate must also be considered\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common assumption\"\u003eAll jeonse loans use the same benchmark\u003c/td\u003e\n\u003ctd data-label=\"What to check in practice\"\u003eCOFIX or bank bond yields may be used depending on the bank and product\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd data-label=\"Common assumption\"\u003eA bank bond yield reported in the news applies immediately\u003c/td\u003e\n\u003ctd data-label=\"What to check in practice\"\u003eIt is reflected only when the contractual benchmark and repricing date align\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eA reduction in the base rate is transmitted according to the same principles. However, the market may have anticipated the reduction in advance. In that case, bank bond yields may move before the decision. The base rate and loan rates may temporarily move in different directions.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#how-to-check-the-latest-base-rate-and-cofix\" class=\"anchor\" id=\"how-to-check-the-latest-base-rate-and-cofix\"\u003e\u003c/a\u003eHow to Check the Latest Base Rate and COFIX\u003c/h2\u003e\n\u003cp\u003eThe latest figures should be checked together with their official publication dates. An undated statement such as “increased for two consecutive months” cannot be assumed to describe the current situation. Check the decision date in the Bank of Korea’s base rate history. Check the COFIX for the relevant month through the Korea Federation of Banks.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eBank of Korea: Base rate history and change dates under monetary policy\u003c/li\u003e\n\u003cli\u003eKorea Federation of Banks Consumer Portal: Monthly COFIX figures and types\u003c/li\u003e\n\u003cli\u003eLoan agreement: Applicable benchmark and repricing cycle\u003c/li\u003e\n\u003cli\u003eBank rate notice: Changes to spreads and preferential rates\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eThe reference date for a market disclosure may differ from that of your contract. Do not assume that the latest published figure applies immediately. Check which published figure will be used on the next repricing date.\u003c/p\u003e\n\u003ch2\u003e\n\u003ca href=\"#frequently-asked-questions\" class=\"anchor\" id=\"frequently-asked-questions\"\u003e\u003c/a\u003eFrequently Asked Questions\u003c/h2\u003e\n\u003ch3\u003e\n\u003ca href=\"#if-the-base-rate-rises-does-a-variable-rate-rise-by-the-same-amount\" class=\"anchor\" id=\"if-the-base-rate-rises-does-a-variable-rate-rise-by-the-same-amount\"\u003e\u003c/a\u003eIf the base rate rises, does a variable rate rise by the same amount?\u003c/h3\u003e\n\u003cp\u003eIt does not always rise by the same amount. The movement in the contractual benchmark is reflected first. Changes in the spread and preferential rate also affect the final rate.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#are-existing-fixed-rate-loans-also-affected\" class=\"anchor\" id=\"are-existing-fixed-rate-loans-also-affected\"\u003e\u003c/a\u003eAre existing fixed-rate loans also affected?\u003c/h3\u003e\n\u003cp\u003eFor fully fixed-rate loans, the contracted rate is generally maintained until maturity. However, a hybrid-rate loan converts to a variable rate after the fixed-rate period. You should also check whether preferential terms have been lost.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#does-the-loan-rate-change-immediately-on-the-cofix-publication-date\" class=\"anchor\" id=\"does-the-loan-rate-change-immediately-on-the-cofix-publication-date\"\u003e\u003c/a\u003eDoes the loan rate change immediately on the COFIX publication date?\u003c/h3\u003e\n\u003cp\u003eExisting loans generally change on the contractually specified repricing date. The publication date and actual application date may differ. Check the rate adjustment date in the contract.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#can-the-loan-rate-rise-even-if-the-base-rate-is-held-steady\" class=\"anchor\" id=\"can-the-loan-rate-rise-even-if-the-base-rate-is-held-steady\"\u003e\u003c/a\u003eCan the loan rate rise even if the base rate is held steady?\u003c/h3\u003e\n\u003cp\u003eYes. Bank bond yields and COFIX move according to market conditions. An increase in the spread or a reduction in the preferential rate may also be the cause.\u003c/p\u003e\n\u003ch3\u003e\n\u003ca href=\"#where-can-i-find-my-loans-benchmark\" class=\"anchor\" id=\"where-can-i-find-my-loans-benchmark\"\u003e\u003c/a\u003eWhere can I find my loan’s benchmark?\u003c/h3\u003e\n\u003cp\u003eCheck the rate application section of the loan agreement. It may also be displayed on the loan details screen in the bank’s app. If it is difficult to find, ask the bank for the name of the benchmark and the next repricing date.\u003c/p\u003e\n","tags":["Bank of Korea","Base rate","Monetary policy","Everyday Finance","Loans","Mortgage"],"faqs":[{"question":"When the base rate rises, does the variable loan rate also rise by the same amount?","answer":"It does not always rise by the same amount. The final rate is determined by adding changes in the spread and preferential rate to the amount by which the contractually specified COFIX or bank bond rate has moved."},{"question":"Does the interest on a loan increase starting the day after a base rate hike?","answer":"Existing loans generally do not change immediately. The new benchmark is applied only when the 3-, 6-, or 12-month repricing date specified in the contract arrives."},{"question":"Are fixed-rate loans unaffected by increases in the base rate?","answer":"In principle, a fully fixed-rate loan maintains the agreed rate until maturity. A hybrid-rate loan converts to a variable rate after the fixed-rate period ends, so it is affected by the benchmark at that time."},{"question":"Can loan rates rise even if the base rate is held steady?","answer":"Yes. Bank bond rates and COFIX may rise independently, or the spread may increase. The final rate may also rise if you fail to meet the conditions for a preferential rate."},{"question":"When COFIX is announced, is it applied immediately to existing mortgage loans?","answer":"Publication and application are separate. For existing loans, the applicable COFIX is reflected according to the agreed repricing date and reference date."},{"question":"Where can I check which benchmark my loan tracks?","answer":"Check your loan agreement and the loan details screen in your bank's app. You should look for the benchmark name, the specific COFIX type, the repricing frequency, and the next rate change date."}],"sources":[{"url":"https://www.bok.or.kr/portal/singl/baseRate/progress.do?dataSeCd=01\u0026menuNo=200643","title":"Bank of Korea Base Rate Trends","type":"data_point"},{"url":"https://portal.kfb.or.kr/compare/cofix.php","title":"Korea Federation of Banks Consumer Portal COFIX Disclosure","type":"data_point"}],"images":[{"id":1226,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTc0NjUsInB1ciI6ImJsb2JfaWQifX0=--d7f8d2975866d531cf9566cff3ea9c98c0dc10ea/ai-767afa4b.webp","is_representative":true,"generation_method":"ai_photo","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"은행 창구에서 금리 자료를 보며 상담받는 여성 고객","caption":"은행 직원이 고객에게 대출금리 관련 자료를 설명하고 있다.","description":null},"en":{"alt":"Woman reviewing an interest rate document with a bank adviser","caption":"A bank adviser explains loan rate information to a customer.","description":null},"ja":{"alt":"銀行窓口で金利資料を見ながら相談する女性客","caption":"銀行員が顧客にローン金利の資料を説明している。","description":null},"es":{"alt":"Mujer revisando un documento sobre tasas con un asesor bancario","caption":"Un asesor bancario explica a una clienta información sobre las tasas de préstamo.","description":null},"id":{"alt":"Nasabah perempuan meninjau dokumen suku bunga bersama petugas bank","caption":"Petugas bank menjelaskan informasi suku bunga pinjaman kepada nasabah.","description":null},"pt":{"alt":"Mulher analisando um documento de juros com um consultor bancário","caption":"Um consultor bancário explica a uma cliente informações sobre taxas de empréstimo.","description":null},"zh-hant":{"alt":"女性客戶在銀行櫃檯與行員查看利率資料","caption":"銀行行員向客戶說明貸款利率相關資料。","description":null},"de":{"alt":"Frau prüft mit einem Bankberater Unterlagen zu Zinssätzen","caption":"Ein Bankberater erläutert einer Kundin Informationen zu Kreditzinsen.","description":null}}},{"id":1227,"url":"https://injoys.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTc0NzEsInB1ciI6ImJsb2JfaWQifX0=--6f9f5cdc4ff25874acdcc433070f643ecbbabb5e/ai-6764e3b8.webp","is_representative":false,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"은행과 상승 그래프, 달력, 주택대출 서류, 금리 변동 차트를 나타낸 금융 일러스트","caption":"기준금리 상승이 시차와 조건에 따라 대출금리에 반영되는 과정을 보여준다.","description":null},"en":{"alt":"Bank, rising graph, calendar, mortgage document, and three interest-rate adjustment charts","caption":"The illustration shows how a base rate increase reaches loan rates at different times and under different terms.","description":null},"ja":{"alt":"銀行、上昇グラフ、カレンダー、住宅ローン書類、3種類の金利変動チャート","caption":"政策金利の上昇が時期や条件に応じてローン金利へ反映される流れを示している。","description":null},"es":{"alt":"Banco, gráfico ascendente, calendario, documento hipotecario y tres gráficos de ajuste de tasas","caption":"La ilustración muestra cuándo y según qué condiciones una subida del tipo base se refleja en los préstamos.","description":null},"id":{"alt":"Bank, grafik naik, kalender, dokumen KPR, dan tiga grafik penyesuaian suku bunga","caption":"Ilustrasi ini menunjukkan waktu dan ketentuan penerapan kenaikan suku bunga acuan pada bunga pinjaman.","description":null},"pt":{"alt":"Banco, gráfico em alta, calendário, documento hipotecário e três gráficos de ajuste de juros","caption":"A ilustração mostra quando e sob quais critérios a alta da taxa básica chega aos juros dos empréstimos.","description":null},"zh-hant":{"alt":"銀行、上升圖表、日曆、房貸文件與三種利率調整走勢圖","caption":"插圖呈現基準利率上升依不同時點與條件反映至貸款利率的過程。","description":null},"de":{"alt":"Bank, steigendes Diagramm, Kalender, Hypothekenunterlagen und drei Zinsanpassungsgrafiken","caption":"Die Illustration zeigt, wann und nach welchen Kriterien ein höherer Leitzins in Kreditzinsen einfließt.","description":null}}}],"published_at":"2026-09-12T02:05:26+09:00","updated_at":"2026-09-12T02:05:26+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant","de"],"url":"https://injoys.com/en/articles/base-rate-loan-rate-reset-timing"}