Although the bank bond five-year interest rate, which serves as the benchmark for fixed-rate household mortgage loans, has dropped to 2.7% per year, the mortgage interest rate remains stagnant at around 4% per year. This is because banks are not lowering the final loan rates by raising additional charges and lowering preferential rates, despite the reduction in the benchmark interest rate. While it is said that the threshold has been raised to prevent a surge in household loans, some argue that it ultimately leads to benefiting the banks.
According to the Korea Financial Investment Association, the bank bond (unsecured · AAA) five-year interest rate recorded 2.756% on the 24th. This is the first time the bank bond five-year interest rate has fallen to the 2.7% range in three years since March 2022. The rate, which was 3.803% at the end of May last year, has dropped to the 3.1% range in December, and after entering the 2.9% range in February, it has been showing a downward trend.
In contrast, the bank mortgage interest rate remains unchanged in the 4% range. The variable mortgage rates of the four major commercial banks, including KB Kookmin, Shinhan, Hana, and Woori, were between 4.07% and 5.59% as of the 23rd. The fixed-rate mortgage (mixed type) was recorded at 3.38% to 5.04%. Compared to the average mortgage rate of the four banks for new loans last May (3.83% to 4.02%), there is no significant difference in average rates.
This indicates that banks are artificially maintaining high loan rates by increasing additional charges despite the reduction in the benchmark interest rate. Additional charges reflect the bank's operating costs, credit risks, and capital costs, varying based on the borrower's credit rating, type of collateral, and income stability. Additionally, lowering the preferential rate can also reduce the mortgage rates. Preferential rates are the interest rate benefits applied when borrowers use other financial products from the bank or meet specific conditions.
The rate resulting from subtracting the preferential rate from the additional charge is the source of the bank's interest revenue, and this value is on the rise. According to the bank association, the 'additional charge - preferential rate' for new household mortgages granted by the four major banks last May ranged from 0.02 to 0.24 percentage points, but in February of this year, it has risen to between 1.27 and 1.54 percentage points, an increase of over 1 percentage point. The proportion of this value in the overall mortgage rate has also risen more than sixfold, from a maximum of 5% to 34%.
In February, the financial authorities stated that they would directly review the basis for calculating loan rates, focusing on banks' additional charges and preferential rate adjustments, in order to restrain excessive interest practices. However, this momentum has weakened recently due to a surge in household loans. The fact that household loans, which appeared to be slowing last month, are increasing again this month is also limiting the financial authorities' scope for action.
Banks have stated that they plan to maintain a high interest rate regime for the time being due to household debt management. A senior official at a commercial bank noted, "There are no plans to lower loan rates within the first half of this year," explaining that since it is a time when household loan management is necessary, there will be no changes to loan regulations or interest rates during the first half.