The market interest rate continues to decline, and the household loan rates in the banking sector have fallen for the fourth consecutive month. The dwellings mortgage rates also decreased for two consecutive months.
According to the 'weighted average interest rate' statistics announced by the Bank of Korea on the 30th, the household loan interest rate of deposit banks for March (based on new transactions) decreased to 4.51% from the previous month (4.52%) by 0.01 percentage points (p). The household loan interest rate has been on a downward trend for four consecutive months since December last year (4.72%·-0.07%p).
The types of household loans that make up the household loan interest rates, including jeonse funds loans, general credit loans, and dwellings mortgage loans, have all fallen. The jeonse funds loan interest rate decreased from 4.09% in February of this year to 3.99% last month. During the same period, the credit loan interest rate fell from 5.50% to 5.48%, and the dwellings mortgage loan interest rate dropped from 4.23% to 4.17%. The dwellings mortgage loan interest rate has decreased for two consecutive months since February of this year (-0.04%p·4.23%).
Kim Min-soo, head of the Financial Statistics Team at the Bank of Korea, noted, "As bank bonds interest rates and indicators such as COFIX have fallen, banks have lowered additional charges, leading to a 0.01%p decrease in household loan rates, primarily for dwellings mortgage loans and jeonse funds loans."
The interest rate for corporate loans has been recorded at 4.32%, down by 0.11%p. It has been declining for four months since December last year (-0.14%p). Large corporations recorded a decrease of 0.09%p to 4.32%, while small and medium-sized enterprises showed a decrease of 0.14%p to 4.31%. Overall, the bank loan rates for both households and corporations have also dropped from 4.46% to 4.36% within a month.
The savings deposit interest rate (based on new transactions) for deposit banks last month fell to 2.84% from 2.97%, a decrease of 0.13%p. It has been declining for six consecutive months since October of last year. The pure savings deposit rates such as regular deposits (2.83%) and rates for market-type financial products like financial bonds and certificates of deposit (CD) (2.89%) each decreased by 0.14%p and 0.08%p, respectively. The interest rate spread (loan interest rate - deposit interest rate) widened to 1.52%p from the previous month (1.49%p) by 0.03%p.