Woori Bank Suspends 'Hybrid' Mortgage Loans... Expands Fixed-Rate Options

In Line with Authorities' Policy to Expand Fixed-Rate Loans

Woori Bank has raised both the upper and lower limits of its 5-year fixed-rate mortgage loan interest rates by 0.11%, while Shinhan Bank plans to increase its mortgage loan interest rates by 0.05% starting from the 15th. The photo shows a Woori Bank branch in Seoul. Photo by Jinhyung Kang aymsdream@

Woori Bank announced that starting from the 21st, it will no longer offer mixed-type mortgage loans and mortgage loans linked to the negotiable certificate of deposit (CD) interest rates.

On the same day, Woori Bank posted a notice titled "Notice on Changes to the Operation Standards of Real Estate Financial Product Benchmark Interest Rates" on its website, stating that from tomorrow, it will stop accepting new applications for CD-linked loans and fixed-rate mixed interest (3-year and 5-year) products under its representative mortgage loan products, Woori Apartment Loan and Woori Real Estate Loan. Increases on existing loans for these products will also be halted.

This move is interpreted as following the financial authorities' policy to expand fixed-rate loans. Last year, the Financial Supervisory Service set a target ratio of 30% for banks' own mortgage loans to be either "pure fixed-rate" or "periodic mortgage loans" with an interest rate adjustment cycle of five years or more. However, it is known that some of the four major banks failed to meet this target ratio.

Accordingly, it is expected that demand will concentrate on the 5-year periodic (5-year fixed-rate cycle) mortgage loan products when obtaining a mortgage loan from Woori Bank.

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