[천지일보=김누리 기자] With the Bank of Korea raising the base rate by 0.25%p, it is predicted that the loan interest rate will reach the 7% range by the end of this year. The reason is that the BOK will raise the base rate to at least 2.00%.
With the loan interest rate expected to be in the 7% range for the first time in about 13 years, inquiries about the loan interest rate and the burden of repayment of principal and interest are increasing at the banking counseling window and major online communities.
Some analysts are also suggesting that the rate of increase in loan interest rates may not be as fast as expected due to the fact that the market interest rate has already reflected expectations for future base rate hikes in Korea and the US, and competition among banks due to the decline in household loans.
The Monetary Policy Committee (Monetary Policy Committee) of the Bank of Korea raised the base interest rate by 0.25%p from 1.25% to 1.50% on the 14th. The recent sharp rise in consumer prices, such as the 4% rise in consumer price inflation, was followed by an interest rate hike.
KB Kookmin, Shinhan, Hana, and Woori Bank’s variable interest rate for mortgage loans (linked to new Cofix), which will be applied on the 18th, as the Cofix (financing cost index), which is the reference rate for the variable interest rate on mortgages, rose 0.17%p from the end of last year. ) recorded a level of 3.420~5.342% per annum. The upper end alone rose 0.272%p.
As of March, announced on the 15th, the new Cofix increased by 0.02%p from 1.70% to 1.72% in a month. Depending on the bank, the new cofix was immediately reflected on the 16th or will be applied from the 18th. The interest rate for the hybrid (fixed type) mortgage loan jumped from 3.600 to 4.978% per annum to 3.900 to 6.380%. The lowest interest rate soared by 0.300%p and the highest interest rate soared by 1.402%p.
This is because the yield of 5-year bank bonds (AAA, no guarantee), which is mainly used as an indicator of fixed interest rates for mortgage loans, soared 1.169%p from 2.259% to 3.428%. Interest rates in the bond market, including bank bonds, have recently risen rapidly, reflecting the possibility of an accelerated US tightening rate and the prospect of inflation (inflation).
For credit loans, the current interest rate of 3.532 to 5.180% (grade 1, 1 year) is applied. Compared to the end of December last year (3.500~4.720%), the lower end jumped by 0.032%p and the upper end by 0.460%p, exceeding the 5% level.
The upward trend in loan interest rates is expected to continue until at least the end of the year. The Monetary Policy Committee (Monetary Policy Committee) of the Bank of Korea is expected to continue raising the base rate within this year in response to inflationary pressures and US monetary tightening. As a result, market interest rates are also generally rising, and there is also a forecast that an era of 7% loan interest rates will open.
In the midst of this, it is expected that the debt burden of borrowers will increase due to the increase in loan interest rates. According to BOK statistics, as of the end of last year, the balance of household credit reached 1,756 trillion won (1862 trillion won including card usage), and 76.1% of users were using variable rate loans. Three out of four people are exposed to the risk of interest rate fluctuations.
Assuming that the loan interest rate rises by the extent of this base rate hike (0.25%p), households’ annual interest burden will increase by about 3.3 trillion won. It is about 160,000 won per borrower.
Considering that the base rate has been raised 4 times (1.00%p) since August of last year, the household interest burden increased by more than 13 trillion won in 8 months. The average increase in interest burden per borrower is about 650,000 won.
It is highly likely that the actual borrower’s interest burden will be higher than this. This is because the bank loan interest rate is set by adding the additional interest rate reflecting the bank margin to the reference interest rate such as the base rate.
In addition, it is expected that the US Fed will take a ‘big step’ in May to catch the soaring inflation. The Bank of Korea is also expected to raise the base rate to 2% or more within the year, and loan interest rates are expected to continue rising for the time being. The industry is predicting that the highest interest rate on fixed-type main loans will easily exceed 7% within the year.
On the other hand, there are speculations that loan interest rates will not soar as much as feared. It is analyzed that interest rates will not rise as banks are lowering interest rates to expand their top-line growth while the growth rate of household loans has recently slowed considerably.
In fact, as the balance of household loans lags behind for four months in a row until last month, banks have recently been competitively lowering lending rates by adjusting additional interest rates.
In addition, most of the bank loan interest rates, which are expressed as breaking through the 6-7% range, are at the highest level without any preferential rates applied. This is why it is predicted that the actual interest rate experienced by borrowers will be lower than the highest interest rate in the banking sector.
According to the Bank of Korea’s ‘Financial Institution Weighted Average Interest Rate’ statistics, the interest rate on mortgage loans at deposit banks in February (based on the weighted average and new transaction amount) rose to the highest level in 8 years and 11 months, but it is still around 3.88% per annum. .
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