As market rates rose, the lending rate for mortgage loan hit the highest level in 27 months.
According to the "weighted average rates of financial institutions in February" released by the Bank of Korea on the 27th, last month the weighted average lending rate for mortgage loan at deposit banks (on new loans) was an annual 4.32%. This marked a rise for five straight months since Oct. last year and the highest level since Nov. 2023 (4.48%). Among mortgage loan, the fixed rate was 4.3%, up 0.04% from the previous month. The variable rate fell 0.02% over the same period to 4.38%.
The general unsecured credit lending rate fell to 5.53% in February from 5.55% in January. An official at the Bank of Korea said, "It was due to some banks reducing loans to mid- to low-credit borrowers, which carry higher lending rate." The lending rate on household loans that combine mortgage loan and general unsecured credit loans was 4.45%. The decline was driven by the lower general unsecured credit lending rate, marking the first drop in five months since Oct. 2025.
The corporate lending rate in February was 4.2%. It rose 0.05 percentage point (p) from the previous month. During this period, the lending rate for large corporations (4.13%) increased 0.04%p, and the rate for small and midsize corporations (4.28%) rose 0.07%p. The overall bank lending rate, covering both households and corporations, was 4.26%, up 0.02%p from the previous month.
The savings deposit rate, including deposits and market-type financial products, was 2.83%. It rose 0.05%p from the previous month. The rate on pure savings deposits such as time deposits increased from 2.77% to 2.8%. The rate on market-type financial products such as certificates of deposit (CDs) and financial debentures rose from 2.82% to 2.97%. As deposit rates rose more than lending, the new-loans-and-deposits-based loan-to-deposit rate spread (the difference between deposits and lending rate) at banks narrowed 0.03%p from the previous month to 1.43%.
At nonbank financial institutions, the one-year time deposit rate rose across the board, including savings banks (3→3.05%), credit cooperatives (2.84→2.94%), mutual finance institutions (2.74→2.76%), and the Korean Federation of Community Credit Cooperatives (KFCC) (2.88→2.98%). For lending rate, only credit cooperatives (4.55→4.54%) declined, while savings banks (9.44→9.58%), mutual finance institutions (4.35→4.38%),, and the Korean Federation of Community Credit Cooperatives (KFCC) (4.4→4.45%) increased.