Banks Gradually Raise Mortgage Loan Interest Rates

NongHyup Bank Raises Preferential Interest Rate by 0.3%p

[Asia Economy Reporter Kiho Sung] NH Nonghyup Bank is lowering the preferential interest rate on mortgage loans (Judaemae) by up to 0.3 percentage points. This is intended to strengthen the management of rapidly increasing household loans.

According to the financial sector on the 7th, Nonghyup Bank will start adjusting mortgage loans from the 8th. First, the '0.2 percentage points preferential interest rate for first-time new customers' will be removed, and the preferential interest rate provided when choosing a short-term variable rate of one year or less will be lowered to 0.1 percentage points. Previously, it was 0.2 percentage points.

However, the total limit of policy preferential interest rates, such as the preferential interest rate for farmers (0.2 percentage points), remains unchanged at 0.3 percentage points, so the interest rate limit is maintained at 1.2 percentage points.

This interest rate adjustment is necessary to strengthen management as household loans increase. In fact, household loans have shown a steep increase since the beginning of this year. As of the end of last month, the outstanding household loans of the five major banks?KB Kookmin, Shinhan, Hana, Woori, and Nonghyup Bank?amounted to 678.1705 trillion won. This is an increase of 3.7967 trillion won in just one month compared to 674.3738 trillion won at the end of January.

Earlier, Shinhan Bank raised both mortgage loan interest rates and jeonse deposit loan interest rates from the 5th. The mortgage loan interest rate for apartments, which was 2.3~3.55% per annum, was raised by 0.2 percentage points, and the interest rate for Shinhan Jeonse loans guaranteed by the Korea Housing Finance Corporation and the Korea Housing & Urban Guarantee Corporation was also increased by 0.2 percentage points.