Controlling the Pace of Household Loan Growth... KB Kookmin and Shinhan Raise Interest Rates on Jeonse and Mortgage Loans

Kookmin Bank Raises Jeonse Loan Interest Rates by up to 0.2%p
Shinhan Bank Also Increases Mortgage Loan Rates by 0.05%p

Banks have started raising interest rates to slow the pace of household loan growth.

According to KB Kookmin Bank on the 10th, from the 11th, the interest rates on both face-to-face and non-face-to-face jeonse deposit loans will be increased by up to 0.2 percentage points. Earlier, on the 13th, KB Kookmin Bank had already raised the additional interest rate on household real estate secured loans, including mortgage loans, by 0.13 percentage points.

The products subject to this interest rate adjustment are ▲KB Housing Jeonse Deposit Loan ▲KB Jeonse Deposit Safety Loan ▲KB Plus Jeonse Deposit Loan ▲KB Star Jeonse Deposit Loan (non-face-to-face only), with increases ranging from 0.1 to 0.2 percentage points depending on the product.

A KB Kookmin Bank official explained, "The pace of household loan growth has not slowed even at the beginning of this month, so it is necessary to adjust the speed."

Shinhan Bank also plans to raise the interest rates on all loan products based on the 5-year financial bond rate by 0.05 percentage points starting from the 15th.

Earlier, Hana Bank raised mortgage loan interest rates by 0.2 percentage points from the 1st, and Woori Bank plans to increase the interest rates on 5-year term mortgage loans and 2-year fixed-rate jeonse loans by 0.1 percentage points from the 12th. Internet bank K Bank also raised the interest rate by 0.1 percentage points on the 5-year variable rate refinancing product for apartment mortgage loans as of the previous day. Jeonse loans were also increased by up to 0.15 percentage points depending on the product.

The reason banks are consecutively raising interest rates is due to recent pressure from financial authorities to slow the pace of household loan growth. The financial authorities also plan to conduct on-site inspections of banks regarding the status of household loans.

According to the 'Financial Market Trends in June 2024' announced by the Bank of Korea on the same day, the balance of household loans in the banking sector last month was 1,115.5 trillion won, an increase of 6 trillion won from the previous month. In particular, mortgage loans in the banking sector increased by 6.3 trillion won last month alone, marking the largest increase since August last year (7 trillion won).