Banks’ mortgage loan rate averaged 3.51 per cent in November, up 0.25 percentage point from a month earlier, according to the data by the Bank of Korea
South Korean banks’ mortgage rates hit the highest in more than 7 years in November amid rising borrowing costs, central bank data showed Thursday.
Banks’ mortgage loan rate averaged 3.51 per cent in November, up 0.25 percentage point from a month earlier, according to the data by the Bank of Korea (BOK).
This marked the highest since July 2014, when the corresponding rate was 3.54 per cent.
Banks’ unsecured loan rate also rose 0.54 percentage point to 5.16 per cent last month, the highest level since September 2014, when it was 5.29 per cent.
The average interest rate on household loans thus rose to 3.61 per cent in November from 3.46 per cent the prior month, the highest since the 3.61 per cent in December 2018.
Loan rates have been on the rise recently in line with the government’s drive to put a lid on fast growing household debt and the central bank’s rate hikes intended to tame inflation.
In late November, the BOK raised its policy rate by 0.25 percentage point to 1 per cent, three months after it announced a quarter percentage point rate hike in August.
The average rate for bank deposits, meanwhile, came to 1.57 per cent in November, up 0.28 percentage point from a month earlier, the BOK said.
South Korean lenders’ loan-deposit spread, a gauge of banks’ profitability from lending, stood at 1.66 percentage points last month, lower than October’s 1.78 percentage points.
The Bank of Korea was the first major developed country to start raising interest rates earlier this year, having raised rates twice as part of efforts to slow down growth in household debt.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.