Internet banks and commercial banks' mortgage loan rates enter the 3% range
Lowest jeonse loan rates also in the 3% range
"At this rate, it's worth taking a loan to move"
Bond yields fall amid expectations of tightening policy end
Office worker Lee Sua (37) recently reinstalled the internet banking app she had deleted after reading articles about banks joining the wave of interest rate cuts. "I don't think house prices will drop significantly in the future, and since interest rates have come down a bit, I've been looking at apartments since the weather warmed up," she said. "I checked the rates at internet banks after a long time and was surprised to see that the variable mortgage loan rate was in the 3% range. At this rate, I think it's worth taking out a loan to move," she added.
The downward trend in bank interest rates has become clear. Mortgage loan rates at commercial and internet banks have dropped to the 3% range. Compared to January this year, when rates had risen up to 8% due to rate hikes starting last year, this is a significant decrease. As of the 27th, the variable mortgage loan rates at KakaoBank and K Bank ranged from 3.62% to 5.82% and 3.62% to 5.42%, respectively, from lower to upper bounds. Fixed rates also remained in the 3-5% range. Jeonse loan rates similarly had minimum rates in the 3% range.
Mortgage loan rates in the 3% range are also appearing at commercial banks. At commercial banks, fixed rates that switch to variable rates after five years are lower than variable rates. Kookmin Bank (3.66-5.06%), Hana Bank (3.94-4.5%), and NH Nonghyup (3.96-5.86%) have introduced fixed-rate mortgage loans in the 3% range. For variable rates, the minimum rates at all five major banks are still around 4%. A commercial bank official said, "The 5-year bank bond rate, which is the basis for calculating fixed rates, has rapidly declined, making fixed rates lower than variable rates," adding, "Nowadays, 7 out of 10 mortgage loan customers choose fixed rates."
According to last month's mortgage loan interest rate segment handling ratio (installment repayment method) from the Consumer Portal of the Korea Federation of Banks, the proportion of loans with interest rates between 3.5% and below 4% among total mortgage loan amounts was 3.8% at K Bank and 2.4% at KakaoBank. Shinhan Bank also recorded 2%. Compared to the period from December last year to January this year, when 3% range loans were scarce, interest rates have relatively stabilized.
An internet bank official said, "In March, loans in the 3% range will increase significantly compared to the previous month," adding, "We offer interest rate discounts up to 0.6 percentage points for customers with no grace period and refinancing loans," and explained, "Since rates are slightly lower than those at commercial banks, one out of three mortgage loan customers is a refinancing loan customer."
The banking sector expects this downward trend in interest rates to continue. Although the U.S. recently raised its benchmark interest rate by 0.25 percentage points following the collapse of Silicon Valley Bank (SVB), expectations that the U.S. tightening cycle is effectively over have grown, which is reflected in falling bank bond rates. A financial industry official said, "The 1-year bank bond rate, which serves as the benchmark for unsecured loan rates, and the 2-year bank bond rate, an indicator for jeonse deposit loans, have steadily declined," adding, "Moreover, financial authorities pressured for rate cuts, helping the return of 3% range rates."
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