As the new year begins, commercial banks have started to gradually resume household lending, but the burden on those who actually need loans has only increased. Mortgage loan interest rates are approaching the 7% range, making interest payments a significant burden. Jeonse loan rates have also surpassed the 6% mark at the upper end, further increasing housing costs for ordinary people. On top of this, the Bank of Korea has signaled that the base rate cut cycle has ended, leading to projections that the dream of homeownership for those without housing will become even more difficult to achieve.

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According to the financial industry on January 20, the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) are offering five-year fixed-rate mortgage loans at rates ranging from 4.20% to 6.48%. The lower end of the rate has risen into the 4% range and continues to climb. Compared to five years ago, when the range was 2.50% to 4.00%, both the upper and lower bounds have increased by about 2 percentage points. In some internet banks, the upper end of mortgage loan rates has even reached 7% to 8%.

The same trend is seen with jeonse loan rates. The five major commercial banks are offering jeonse loans at rates between 3.02% and 5.67%, with the upper end nearly touching 6%. For internet banks, the upper end of jeonse loan rates has already surpassed 6%.

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The reason for rising bank lending rates is that the benchmark market interest rates continue to increase. The five-year financial bond (AAA), which serves as the basis for loan rate calculations, stood at 3.649% as of January 19, 2026, the highest level in one year and seven months since June 2024. The COFIX (Cost of Funds Index), which is the benchmark for variable-rate mortgage loans, has also risen for four consecutive months, increasing upward pressure on mortgage loan rates. According to the Korea Federation of Banks, the new COFIX for December 2025 was 2.89%, up 0.08 percentage points from the previous month.

In addition to the burden of higher interest rates, the significant reduction in loan limits is another factor making it harder to buy a home. Under the June 27, 2025 measures, the mortgage loan limit for home purchases in the Seoul metropolitan area and regulated regions was capped at 600 million won. The October 15, 2025 measures further reduced the loan limit to 400 million won for homes priced between 1.5 billion and 2.5 billion won, and to a maximum of 200 million won for homes over 2.5 billion won. With the median price of apartments in Seoul already exceeding 1.5 billion won, some say that buying a home with a loan has become virtually impossible.

As mortgage loan interest rates are expected to rise further, there are also forecasts that the dream of 'owning a home' for those without housing will become even more distant.

On the 15th, the Bank of Korea kept the base interest rate steady at 2.5% per annum and completely removed the phrase 'possibility of lowering the base rate' from the monetary policy statement, which had been mentioned previously. The market is interpreting this as a signal that the interest rate cut cycle has effectively ended.

A financial industry insider said, "In last year's final monetary policy statement, the 'base rate cut stance' was revised to 'possibility of a cut,' but this time even that expression has disappeared," adding, "The bond market views this as the end of the interest rate cut cycle, and the current interest rate volatility is seen as a process of finding the appropriate interest rate level."