'End of Interest Rate Competition'... Woori Bank Also Raises Loan Interest Rates by 0.1~0.3%P

Shinhan and KB Followed by Woori Bank Raising Mortgage and Jeonse Loan Interest Rates

Woori Bank will restore the interest rates on its general loan products, which had been competitively lowered to attract loan customers following the government's loan refinancing service, back to their previous levels.

According to the financial sector on the 23rd, Woori Bank plans to raise the interest rates on mortgage loans and jeonse deposit loans by 0.1 to 0.3 percentage points (P) starting from the 28th.

The interest rates for face-to-face mortgage loan products with a maturity of 15 years or more will increase by 0.1 to 0.3 percentage points, and non-face-to-face product rates will also rise by 0.1 to 0.2 percentage points. For jeonse deposit loans, the interest rates for Woori Jeonse Loan face-to-face products and Woori WON Jeonse Loan non-face-to-face products will also increase by 0.1 to 0.3 percentage points.

Earlier, Shinhan Bank raised the interest rates on mortgage loans and jeonse deposit loans by 0.05 to 0.20 percentage points per product starting from the 19th. For Shinhan Bank's representative mortgage loan product, Shinhan Housing Loan, the new Cost of Funds Index (COFIX) product increased by 0.20 percentage points to 4.21?5.82%, and the 5-year financial bond product rose by 0.15 percentage points to 3.52?5.53%.

The representative jeonse deposit loan product, Shinhan Jeonse Loan, also increased by 0.10 percentage points to 3.96?5.46% based on the Korea Housing Finance Corporation (HF) guaranteed product. Additionally, refinancing products for household loans saw increases of 0.07 to 0.10 percentage points for mortgage loans and 0.05 to 0.10 percentage points for jeonse deposit loans.

KB Kookmin Bank also raised the additional interest rates on some mortgage loan products by 0.23 percentage points on the 7th. The banking sector's slight increase in mortgage loan interest rates is aimed at managing household debt. A representative from a commercial bank explained, "To ensure stable management of household debt, we have raised interest rates on some loan products," adding, "Even small increases or decreases in interest rates can effectively reduce loan demand."

The government has set a policy to manage household debt growth within the nominal growth rate starting this year to stabilize household debt, which has exceeded 100% of the gross domestic product (GDP). The government's nominal growth rate target for this year is 4.9%. In line with this, major financial holding companies have also informed the authorities that they will manage this year's household debt growth rate within the range of 1.5 to 2.0%.