Despite a base rate cut by the Bank of Korea, mortgage loan rates have risen for four consecutive months due to the impact of increased additional charges by banks. Rates for jeonse loans and credit loans are also on the rise. As lending rates increase across the board, household loan rates have climbed to the upper 4% range.
According to the 'weighted average interest rates of financial institutions for Nov. 2024' released by the Bank of Korea on the 27th, the mortgage loan rate at depository banks for last month stood at 4.30%, up 0.25 percentage points from the previous month's 4.05% for new loan disbursements. The variable rate for mortgage loans increased by 0.11 percentage points to 4.25%, while the fixed rate rose by 0.27 percentage points to 4.31%.
Mortgage loan rates have been climbing since August (3.51%·+0.01%p) for four months. The Bank of Korea explained that the effect of increased additional charges by banks for portfolio management until October was reflected in the rates with a delay.
Kim Min-su, a financial statistics team manager at the Bank of Korea's economic statistics department, said, “In December, the impact of additional charge increases on the rates is expected to be minimal,” and noted that “for fixed-rate mortgage loans, the rate is likely to decrease as the five-year bank bond rate, which serves as a benchmark, is falling relatively sharply.”
The rates for jeonse loans and general credit loans also rose in tandem due to the impact of increased additional charges. The rate for jeonse loans increased from 4.26% in October to 4.43% in November. This upward trend has been ongoing since August (3.82%·+0.04%p) for four months. The general credit loan rate increased from 5.86% in October to 6.17% in November.
Household loan rates, which encompass mortgage, jeonse, and general credit loans, rose from 4.55% to 4.79%. Household loan rates have been on an upward trend for four consecutive months since August (4.08%·+0.02%p). However, the increase was smaller compared to the previous month (0.32%p).
Corporate loan rates increased by 0.05 percentage points from October to 4.76%. The previous month saw a decrease of 0.06 percentage points to 4.71%, but this turned into an increase in a month. Large corporations saw a decrease of 0.05 percentage points to 4.74%, while small and medium-sized enterprises witnessed an increase of 0.13 percentage points to 4.77%.
The deposit rate at depositor banks for October (new transactions) decreased by 0.02 percentage points from the previous month to an annual 3.35%. The rate for pure savings deposits like time deposits fell by 0.01 percentage points to 3.36%, and the rate for market-type financial products like financial debentures and certificates of deposit (CDs) decreased by 0.03 percentage points to 3.31%.
Deposit rates for non-bank financial institutions (based on one-year maturity fixed deposits) all declined. Loan rates (general loans) dropped at mutual finance and Saemaeul Geumgo, while rising at mutual savings banks and credit unions (Shinhyeop).
Deposit rates were 3.61% (-0.12%p) at mutual savings, 3.44% (-0.04%p) at credit unions, 3.30% (-0.08%p) at mutual finance, and 3.46% (-0.03%) at Saemaeul Geumgo. Loan rates were 11.50% (+0.18%p) at savings banks, 5.25% (+0.01%p) at credit unions, 4.84% (-0.30%) at mutual finance, and 4.84% (-0.13%) at Saemaeul Geumgo.