Shinhan Bank to Uniformly Reduce Mortgage Loan Rates Exceeding 5% Annually to 5%

Implementation of Program for Vulnerable Borrowers During Interest Rate Hike Period

[Asia Economy Reporter Yu Je-hoon] Shinhan Bank announced on the 3rd that it will implement the 'Vulnerable Borrower Program during Interest Rate Hikes' to alleviate the burden on financial consumers vulnerable to interest rate increases.

First, as of the end of last month, Shinhan Bank will uniformly reduce the interest rate for customers using mortgage loans exceeding an annual rate of 5% to 5% per year and support them for one year. For example, if a customer currently using a mortgage loan has an interest rate of 5.6% per year, the customer will bear a 5% annual interest rate, and the bank will support the remaining 0.6% annually.

Additionally, for customers applying for capped interest rate mortgage loans, the bank will bear the additional 0.2% annual interest rate charged to the customer for one year. The capped interest rate mortgage loan is a product jointly promoted by the Financial Supervisory Service and banks, which mitigates the risk of interest rate increases for customers using variable interest rates and limits the annual interest rate increase to within 0.75 percentage points, making it advantageous for customers concerned about rising interest rates.

Furthermore, Shinhan Bank has launched a 2-year financial bond-based jeonse loan product where the bank bears the interest rate fluctuation risk for customers with an annual income of 40 million KRW or less and a jeonse deposit of 300 million KRW or less. This product has the advantage of allowing customers to use a fixed interest rate for two years even if interest rates rise, thereby eliminating the risk of interest rate increases compared to short-term interest rate products.

Shinhan Bank also plans to lower the new interest rate of the representative low-income support product, Saehee Hope Loan, by 0.5 percentage points. A Shinhan Bank official said, "This support program was implemented proactively to protect vulnerable borrowers worried about rising loan interest rates due to recent base rate hikes," adding, "We will continue to monitor market conditions and strive to alleviate the burden on borrowers during periods of rising interest rates."