Defying the Trend: Mortgage Loan Rates Buck the Decline in Market Interest Rates, Leaving Homeowners with a 0.23% Increase

[시사일보=최한규 기자] Last month, household loan interest rates rose against the market interest rate for two consecutive months as banks raised their additional interest rates in response to the financial authorities’ order to manage the increase in household loans.

Accordingly, the so-called deposit margin (loan interest rate – deposit interest rate), which is the basis of banks’ profits, also increased.

According to the ‘Financial Institution Weighted Average Interest Rate’ statistics announced by the Bank of Korea on the 31st, the September household loan interest rate of deposit banks (based on new loan amounts) was 4.23% per annum, up 0.15 percentage points (p) from the previous month (4.08%). It has been on the rise for the second month following August (+0.02%p).

Among household loans, housing mortgage loans in particular rose by 0.23 percentage points from 3.51% to 3.74%. Not only is it an upward trend for two consecutive months, but it is also the largest increase in two years since September 2022 (+0.44%p). Credit loans (5.87%) also rose by 0.22% points, rebounding for the first time in four months.

Kim Min-soo, head of the Bank of Korea’s financial statistics team, said about the background of the rise in household loan interest rates, “The 5-year bank bond interest rate, which is the benchmark interest rate for (loan) fixed interest rates, was 3.22% in September, the same as August, but the bank’s fixed interest rate rose by about 0.23%p.” He explained, “It can be said that most of this increase is due to the banks’ adjustment of additional interest rates to manage household loans.”

In addition, he added, “COFIX, an indicator of the variable interest rate (of loans), fell by about 0.08%p as of the month of application, but for the same reason, the variable interest rate also increased by 0.04%p.”

The corporate loan interest rate (4.77%) also increased by 0.10%p. The interest rates for large corporations (4.81%) and small and medium-sized enterprises (4.74%) increased by 0.03%p and 0.15%p, respectively. This is because, in addition to the increase in banks’ additional interest rates, the interest rate on certificates of deposit (CD, 91 days), which is the benchmark interest rate, also rose slightly.

Overall, the overall banking lending interest rate rose 0.14 percentage points from 4.48% to 4.62% in one month. It turned to an upward trend four months after June.

The deposit bank’s savings receiving (deposit) interest rate (based on new transaction amount) was also 3.40% per annum, an increase of 0.05%p from August (3.35%).

The interest rate on pure savings deposits such as time deposits (3.41%) increased by 0.05%p, and the interest rate on market-type financial products such as financial bonds and certificates of deposit (CDs) (3.36%) increased by 0.04%p.

Team Leader Kim analyzed, “It appears that banks have raised interest rates to re-attract term deposits that mature at the end of the year.”

The difference between the loan interest rate based on the bank’s new transaction amount and the interest rate for savings deposits, that is, the difference between deposit and loan interest rates, was 1.22%p, an increase of 0.09%p from the previous month (1.13%p). This is because the increase in lending interest rates was greater than the deposit interest rate.

However, the interest rate difference between deposits and loans based on balance, not the new handling standard, was reduced by 0.03%p from 2.27%p to 2.24%p.

The deposit interest rates of financial institutions other than banks (based on one-year maturity term deposits and deposits) are 0.05%p, 0.06%p, and 0.07 for credit unions (3.55%), mutual finance (3.38%), and Saemaeul Geumgo (3.55%), respectively. %p fell. Only Mutual Savings Bank (3.73%) rose by 0.09 percentage points.

Loan interest rates fell at mutual savings banks (11.04%·-0.65%p), credit unions (5.42%·-0.03%p), and Saemaeul Geumgo (4.93%·-0.20%p), and mutual finance (5.25%·+ It rose from 0.01%p).