Bank Mortgage Loan Interest Rates Fall to Early 2% Range... Record Low

[Asia Economy Reporter Haeyoung Kwon] Due to the impact of the novel coronavirus infection (COVID-19), market interest rates have fallen, causing the variable interest rate mortgage loan rates of major banks to drop to historically low levels.

According to the financial sector on the 19th, the COFIX (new COFIX)-linked mortgage loan rates based on new loan amounts at KB Kookmin, Woori, and Hana Banks fell to record lows on the 17th, varying by bank.

The new COFIX-linked mortgage loan rates were lowered by 0.17 percentage points from the previous day to 2.47?3.97% per annum at Kookmin Bank and 2.66?3.66% per annum at Woori Bank. Hana Bank's rates decreased by 0.002% to 2.843?4.143% per annum.

Shinhan Bank's rates as of the 17th were 2.55?3.8% per annum, slightly higher than the record low of 2.45?3.46% per annum on the 20th of last month, but still at a low level. NH Nonghyup Bank recorded the lowest rates among the five major banks at 2.28?3.89% per annum, marking a historic low.

The reason variable interest rate mortgage loan rates have fallen to such historic lows is due to the overall decline in market interest rates caused by the COVID-19 crisis.

On the 16th of last month, the Bank of Korea sharply cut the base rate by 0.5 percentage points from 1.25% to 0.75%. This was the first time the base rate fell to the 0% range. Following the Bank of Korea's rate cut, banks adjusted the interest rates on deposit products such as time deposits, which led to a decline in the linked new COFIX rates. COFIX is the weighted average interest rate of deposit products through which domestic banks raise funds.

This content was produced with the assistance of AI translation services.