With the Aug. 13 real estate measures expanding the total volume of household loans in the banking sector, the mood in the previously stalled apartment balance loan market is changing. Banks that secured lending capacity have begun operations by adjusting interest rate terms, and the total loan limit is also expected to increase.
According to the financial sector on the 19th, Shinhan Bank, which supplies balance loans to the THE H Bangbae apartment complex in Seocho District, Seoul, set to begin move-ins next month, lowered the previously guided additional charge rate by 0.1 percentage point (p). NH Nonghyup Bank is also informing allottees that it plans to lower its additional charge rate.
THE H Bangbae is a high-priced complex with an appraised value set at 4 billion won, and because the loan size is large, allottees are reacting sensitively even to a 0.1 p difference. As two of the four banks handling group loans have preemptively moved to adjust rates, it appears the remaining banks' rate setting will also be affected.
Banks expect the currently allocated balance loan limit to increase further. The confirmed scale so far is about 500 billion won, with each of the five major commercial banks at 100 billion won, but there is speculation that a second limit could be allocated. IBKIndustrial Bank of Korea (IBK)(024110) is also said to be actively reviewing handling group loans.
The financial authorities raised this year's household loan total volume growth rate target from 1.5% to 3%. As a result, the financial sector gained about 30 trillion won in additional capacity. However, with the focus on supporting end users, the increased total volume will be prioritized for balance loan borrowers, while other household loan regulations, such as unsecured loans, are expected to remain at previous levels.