The era of ‘7% interest rate’ began in earnest after about 13 years as the highest interest rates on home loans in commercial banks all exceeded 7%, regardless of the type of mortgage, loan or loan credit.
According to the financial industry on the 30th, the various interest rates for mortgage loans at KB Kookmin, Shinhan, Hana, and Woori Bank are 4.970-7.499% per annum as of the 28th.
Compared to 30 September a month ago (4.510 ~ 6.813%), the upper end increased by 0.460 percentage points (p) and the lower end increased by 0.686 percentage points.
This is because the COFIX (funding cost index) based on the new handling amount, the variable interest rate index rate, jumped 0.440 percentage points from 2.960% on the 17th to 3.400%.
This is the highest level in 10 years and 2 months since July 2012 (3.400%).
During the same period, the interest rate on the hybrid mortgage loan (fixed type) also rose from 4.730-7.141% per annum to 5.360-7.431% per annum.
Like the variable rate, not only was the top end above 7%, but the bottom end in particular increased by 0.630 percentage points.
This is because the interest rate on 5-year bank bonds (AAA, unsecured), which is mainly used as an indicator of the hybrid mortgage-type interest rate, has continued to rise recently due to the prospect of a faster tightening than the expect. in the United States and Korea.
Interest rates on credit loans and cheonsei loans were also above 7%.
In one month, the interest rate on credit loans (grade 1, one year) jumped from 5.108 to 6.810% per annum to 5.953 to 7.350%.
The width of the rise at the bottom reaches 0.845 percentage points.
This is because the one-year bank bond yield, an indicator, rose by 0.522 percentage points during the same period.
The top interest rate on a Jeonse loan (Housing Finance Corporation guarantee, two-year maturity), a representative loan yield for ordinary people, was also above 7% last week and is already approaching the mid-7% range (7.350 %).
[표] Commercial Bank Loan Rate Trend
┌───────┬─────────────────────────────
│ │September 30, 2022 │October 28, 2022 │Range variation on bottom and top │
│ │ │ │ │
…
│ Mortgage Loan │4.510~6.813% p.a. │ 4.970~7.499% p.a. │+0.460%p, +0.686%p │
│Flow Rate (New │ │ │ │
│Based on Cofix) │ │ │ │
…
│ Mortgage Loan │ 4.730-7.141% p.a. │ 5.360-7.431% p.a.│ +0.630%p, +0.290%p │
│ Fixed rate (bank │ │ │ │
│Based on 5 year bonds)│ │ │ │
…
│Jeonse Loan (Housing │4.260~6.565% p.a. │4.910~7.248% p.a. │+0.650%p, +0.683%p │
│Guarantee Finance Corporation.│ │ │ │
│ Maturity 2 years) │ │ │ │
…
│Credit Loan Interest Rate (│5.108~6.810% per annum │5.953~7.350% per annum│+0.845%p, +0.540%p │
│Level 1, 1 year) │ │ │ │
…
│ New Cofix │2.960% │3.400% │ + 0.440% │
…
│ 5-year bond bank bonds (A│4.851% │5.136% │+0.285%p │
│AA・No warranty) │ │ │ │
…
│ One-year bank bonds (A│4.348% │4.870% │+0.522%p │
│AA・No warranty) │ │ │ │
└───── see ┴─────────’s┴──────────── watch
※ KB, Shinhan, Hana, Woori Bank, and bond information center data collection
This is the first time in around 13 years since 2009 that the interest rate on commercial banks’ home loans of 7% has been high.
According to Bank A’s highest internal mortgage loan interest rate statistics among the five major commercial banks, it peaked at 8.4% in December 2008, surpassed 7% in September 2007, and then fell back to the 7% range in 2009.
At that time, the mortgage interest rate was calculated based on the MOR (market rate of interest) only, which mainly reflected CDs (certificates of deposit).
Since 2010, COFIX, which reflects comprehensive acquisition costs, has been used as the index rate for mortgage loans with the aim of calculating a more reasonable loan interest rate. Bank officials explained that the ratio was never higher than 7 % at once.
Furthermore, interest rates on loans are likely to rise further by the end of the year.
The banking sector and the market expect the Bank of Korea’s Monetary Policy Committee (hereinafter referred to as the Monetary Policy Committee) to raise the base rate by at least 0.25 percentage points in the next month in response to inflation and an increase in the exchange rate and the huge US Step (increase the base rate by 0.75 percentage points).
So, even if the loan interest rate rises only by the amount of the base rate increase, the top interest rate on home loans, already in the mid-7% range, is likely to approach 8% or higher.
If the top interest rate on home mortgage loans from commercial banks reaches the 8% range, it will be the first time in 14 years since the 2008 financial crisis.
/happy news
