Mortgage loan interest rates below 4% disappear, credit loans at 5% become the trend

Bank Federation Consumer Portal Interest Rate Disclosure as of September

Next Month's Mortgage Variable Interest Rate Based on COFIX Expected to Rise

[Asia Economy Reporter Sim Nayoung] Loan interest rates below 4% have almost disappeared. According to the disclosure on the Consumer Portal of the Korea Federation of Banks as of September 29, the proportion of new mortgage loans (installment repayment type) by interest rate range at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) shows that NH Nonghyup, Woori, and Hana Banks had 0% of loans below 4% per annum. KB Kookmin Bank also had only 2.2%, and Shinhan Bank 1.1% in the below 4% per annum category.

This means that among customers who newly took out installment repayment mortgage loans at these banks in September, almost none received an interest rate below 4% per annum. In effect, mortgage loans with interest rates below 4% per annum have virtually disappeared at the five major banks.

The remaining mortgage loans were mainly concentrated in the 4% to 6% per annum range. At KB Kookmin Bank, 80.4% were in the 4% range and 17.4% in the 5% range, totaling 87.8% in this bracket. Woori Bank had 98.2%, Shinhan Bank 98.5%, NH Nonghyup 99.4%, and Hana Bank 99.9% in this range.

Customers with high-interest mortgage loans above 6% per annum were almost nonexistent at KB Kookmin Bank. Hana (0.1%), Shinhan (0.4%), and NH Nonghyup (0.6%) showed proportions below 1%, while Woori had 1.8%, in the 1% range.

The dominant interest rate for unsecured loans has settled in the 5% per annum range. At KB Kookmin Bank, 27.5% of loans were in the 5% range, the largest share, followed by 19.5% in the 6% range, 17.9% in the 4% range, and 8.2% in the 7% range.

NH Nonghyup had 45.6% in the 5% range. Shinhan and Woori also had the highest proportions of unsecured loans in the 5% range at 35% and 41.6%, respectively. Hana Bank's 5% range loan proportion was 30.7%. The highest proportion of high-interest loans above 8% was at Hana Bank with 13.4%, followed by KB Kookmin Bank at 11.6%.

On the 13th, the Bank of Korea implemented its second big step this year (raising the base interest rate by 0.5 percentage points at once), leading banks to increase deposit interest rates. As a result, if the COFIX (Cost of Funds Index), which serves as the benchmark for variable mortgage loan rates next month, rises, variable mortgage loan rates and unsecured loan interest rates are expected to increase further.

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