The mortgage loan lending rate rose for a fourth straight month, nearing 4.3%. As the view spread that the cycle of base rate cuts has ended, the benchmark bank bond yield fell, affecting rates.
According to the "weighted average interest rates of financial institutions" statistics the Bank of Korea (BOK) released on the 27th, the mortgage loan lending rate on a new-loans basis at deposit banks last month was 4.29%, up 0.06 percentage point (p) from the previous month. The mortgage lending rate has risen for four consecutive months since October last year (+0.02%p, 3.98%).
Jeonse deposit loan lending rates also rose. The jeonse deposit loan lending rate climbed from 3.99% to 4.06%, topping 4% for the first time since February last year (4.09%). This, too, has been on the rise for four months since October last year (+0.02%p, 3.78%).
Lee Hye-young, a Bank of Korea (BOK) financial statistics team manager, said, "The mortgage lending rate rose in step as the five-year bank bond yield, a benchmark rate, increased," and noted, "Long-term yields reflect expectations about the Central Bank's monetary policy, and as the perception has recently spread that the easing phase has ended, rates appear to have risen."
The unsecured credit lending rate fell to 5.55% from 5.87%. It declined for the first time in four months since September last year (-0.1%p, 5.31%). The Bank of Korea (BOK) explained that some banks reduced the share of loans to mid- to low-credit borrowers, which carry higher lending rates, causing overall lending rates to fall.
Overall household loans lending rates rose. Last month's household loans lending rate was 4.5%, up 0.15%p from the previous month. This, too, has increased for four months since October last year (+0.07%p, 4.24%).
The corporations lending rate came in at 4.15%, down 0.01%p. Rates rose for large corporations (4.08%→4.09%), but fell for small and midsize corporations (4.24%→4.21%), leading the overall decline. Across households and corporations combined, the overall bank lending rate was 4.25%, up 0.02%p.
Last month, the savings-type deposits (deposits) rate at deposit banks was 2.01%, up 0.01%p from the previous month. The spread between lending rates and savings-type deposit rates was 2.34%p, down 0.01%p from the previous month.