Did Pressure from Financial Authorities Work? Bank Mortgage Loan Interest Rates Lowered to the 5% Range

[Asia Economy Reporter Bu Aeri] As financial authorities pressure commercial banks to lower loan interest rates, major banks are showing signs of reducing rates. The upper limit of mortgage loan interest rates, which had been above 8%, has dropped to the late 5% range.

NH Nonghyup Bank announced on the 12th that it will lower the variable interest rate on mortgage loans by up to 0.8 percentage points starting from the 20th. With this rate cut, variable-rate mortgage loans will be applied at an annual rate of 5.12% to 6.22%. The upper limit of the interest rate falls to the early 6% range.

Nonghyup Bank had previously implemented rate cuts on fixed-rate mortgage loans and jeonse deposit loans. Fixed-rate mortgage loans are at a minimum of 4.69% per annum, and jeonse deposit loans are at a minimum of 4.55% per annum, which is the lowest level among banks.

Woori Bank will also expand preferential interest rates on household real estate financial products and adjust the head office adjustment rate, a type of additional interest rate, starting from the 13th to create an effect of lowering interest rates.

First, for new apartment mortgage loans based on the 6-month COFIX and 6-month corporate bond rates, interest rates can be reduced by up to 0.7 percentage points each. When additional preferential rates such as salary and pension transfers are applied, the maximum limit for loan interest rate reduction increases from the existing 0.8 percentage points to 1.7 percentage points. Compared to before, the effective interest rate decreases by 0.9 percentage points.

Shinhan Bank and Hana Bank have also recently lowered household loan interest rates. The upper limit of Shinhan Bank’s mortgage loan interest rate, which was in the 6% range earlier this month, dropped to 5.85% per annum on this day, falling to the late 5% range. Hana Bank also lowered interest rates by up to 0.5 percentage points on some mortgage loans, jeonse loans, and credit loans starting from the 1st. KB Kookmin Bank’s mortgage loan interest rates remain at 5.35% to 6.75% (variable rate linked to new balance COFIX) as of this day.

Meanwhile, internet-only banks are also showing movements to lower loan interest rates. K Bank reduced the interest rate on the 'Sajangnim Credit Loan' by up to 0.9 percentage points. The Sajangnim Credit Loan is a product for individual business owners with a maximum loan limit of 100 million KRW. Following this reduction, the Sajangnim Credit Loan offers interest rates ranging from 5.72% to 7.95% per annum.

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