Last month, the interest rate on household mortgage loans rose for the second consecutive month, following an increase in the previous month.
According to the 'average interest rate of financial institutions' statistics released by the Bank of Korea on the 27th, the interest rate on household loans from deposit banks based on new transactions in July was 4.20% per year, down 0.01 percentage points from the previous month (4.21%). This marks eight consecutive months of decline.
Among household loans, the interest rate on mortgage loans increased from 3.93% to 3.96%. The upward trend continued into July, following June. General credit loans rose from 5.03% to 5.34%, while loans under 5 million won decreased from 6.70% to 6.46%.
The interest rate on corporate loans fell from 4.06% in June to 4.04% last month. The interest rate for large corporations (4.00% to 3.99%) dropped slightly more than that of small and medium-sized enterprises (4.11% to 4.08%).
Overall, including households and corporations, the total bank loan interest rate dropped from 4.09% to 4.06% in one month, a decrease of 0.03 percentage points.
The interest rate on savings deposits based on new transactions at deposit banks was 2.51% per year, down 0.04% from June. This represents a continuous decline for 10 months since October last year.
The interest rate on pure savings deposits, including time deposits, decreased from 2.54% to 2.50%, while the interest rate on market-based financial products such as financial bonds decreased from 2.55% to 2.54%.
The difference between the interest rates on newly issued loans and savings deposits (the loan-deposit rate gap) expanded by 0.01% to 1.55% compared to the previous month. The loan-deposit rate gap based on outstanding balances, not new transactions, shrank by 0.02 percentage points to 2.18% compared to the previous month.
Interest rates for deposits from non-bank financial institutions fell for all except mutual savings banks, while lending rates rose for all except mutual savings banks.
The deposit rate for mutual savings banks rose by 0.01 percentage points from the previous month, but those for credit cooperatives (-0.11 percentage points), mutual finance (-0.10 percentage points), and Saemaul Geumgo (-0.12%) fell. The lending rate for mutual savings banks dropped by 0.33 percentage points during the same period, while the rates for credit cooperatives (+0.01%), mutual finance (+0.04%), and Saemaul Geumgo (+0.15%) increased.