60% of Mortgage Loans Have Interest Rates Between 4% and 4.5%

Among the 5 Major Banks, Only Kookmin Bank Holds the Largest Share at 3.5~4%

[Asia Economy Reporter Song Hwajeong] As interest rates continue to rise, the proportion of mortgage loans with an annual interest rate of 4-4.5% among those handled by the five major banks last month has significantly increased.

According to the Bankers Association on the 22nd, 60% of mortgage loans (installment repayment method) from four of the five major banks, excluding KB Kookmin Bank, were concentrated in the 4-4.5% range. At the end of last year, loans in the 3.5-4% range accounted for the largest share, but this structure changed as interest rates continued to rise this year.

By bank, NongHyup Bank had 64.8% in the 4-4.5% range, followed by 32.4% in the 3.5-4% range, and 1.7% in the 4.5-5% range. Shinhan Bank had 60.6% below 4-4.5%, 27.7% below 3.5-4%, and 8.3% below 4.5-5%. Woori Bank had 65.8% in the 4-4.5% range, 20.4% below 4.5-5%, and 12.6% below 3.5-4%. Hana Bank accounted for 62.6% in the 4-4.5% range, 23.5% below 3.5-4%, and 12.8% below 4.5-5%.

In the case of Kookmin Bank, 54.2% was in the 3.5-4% range, the largest share, and 38.2% was in the 4-4.5% range. Notably, Kookmin Bank had a 4.8% share of loans below 3%, ranking third after the 3.5-4% and 4-4.5% ranges.

On the other hand, Woori and Hana Banks did not handle loans below 3%, while NongHyup and Shinhan Banks showed shares of 0.1% and 0.6%, respectively. Loans with interest rates above 5.5% were only handled by Woori Bank. Woori Bank had 0.3% in the 5.5-6% range and 0.2% above 6%. Woori Bank explained that these loans were made to low-credit borrowers rated 9.

Compared to the previous month, the share of loans by interest rate showed significant differences. In February, NongHyup had 66.1% in the 3.5-4% range and only 3.6% in the 4-4.5% range, but in March, these reversed to 32.4% and 64.8%, respectively. Hana Bank had 31% in the 3-3.5% range in February, which sharply dropped to 0.9% in March, while the share below 4-4.5% rose dramatically from 1.1% to 62.6%. The 4.5-5% range, which had no share in the previous month, also expanded to 12.8%.

As the upward trend in interest rates is expected to continue, the share of low-interest loans is expected to steadily decrease, while the share of high-interest loans will continue to rise. The Bank of Korea raised the base rate by 0.25 percentage points to 1.5% on the 14th and is expected to raise it to the 2% range by the end of the year. Fixed (hybrid) mortgage rates exceeded 6% at the upper end last month and are expected to reach the 7% range within this year.

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