With the government tightening oversight of household loans, banks that closed their lending windows early at the end of last year are resuming sales of key products such as mortgage loan as the new year begins. Loan access for genuine borrowers is expected to ease for the time being, but interest rates remain on an upward trend.
According to the financial sector on the 2nd, major banks on this day resumed sales of key products such as mortgage, credit, and jeonse deposit loans that were halted at the end of last year. KB Kookmin Bank restarted refinancing to other banks for mortgages and jeonse deposit loans on this day, after suspending them on Nov. 24 last year. It also resumed sales of some credit loan products that were halted around the same time.
Shinhan Bank resumed mortgage and jeonse deposit loans handled by loan consultants (solicitors) that had been blocked since Aug. last year. As the financial authorities tightened management of household loans last year, loan products handled by solicitors not affiliated with banks were suspended early.
Woori Bank on this day lifted the sales cap (1 billion won per month) it had set last Oct. at each branch for mortgage and jeonse deposit loan products. The move normalizes a situation in which two or three large loans would fill the monthly limit, effectively making loan sales impossible.
Hana Bank will again accept mortgage applications from this day, including for living-stability funds. Non-face-to-face applications for jeonse deposit loans are also expected to begin this month once system development is completed.
Although all major commercial banks have resumed lending sales, interest rates are expected to remain high for the time being as the financial authorities keep a close watch on household loan management. The yield on 5-year financial debentures (unsecured, AAA), which serves as the benchmark for 5-year fixed-rate mortgages, is currently around 3.5%. The Cost of Funds Index (COFIX), the benchmark for variable-rate mortgages, has also risen for three consecutive months since Sep. last year.
A banking industry official said, "The government continues to keep an eye on the household loan situation, so aggressive sales are difficult even at the start of the year," adding, "On top of that, market rates are rising, and the trend of raising the lending threshold via rates is likely to continue for the time being."