As market rates rose, the mortgage loan lending rate hit the highest level in 27 months.
According to the "weighted average rates of financial institutions for February" that the Bank of Korea released on the 27th, last month's weighted average lending rate on mortgage loans at deposit banks (new lending basis) was an annual 4.32%. This marked a fifth straight month of increases since Oct. last year and the highest level since November 2023 (4.48%). Among mortgage loans, 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 lending rate fell from 5.55% in January to 5.53% in February. An official at the Bank of Korea said, "It reflects some banks reducing loans to mid- to low-credit borrowers, who face higher lending rates." The lending rate for household loans that combine mortgage loans and general unsecured loans is 4.45%. The decline was driven by the lower general unsecured lending rate and marks the first drop in five months since Oct. 2025.
The corporate lending rate in February was 4.2%, up 0.05 percentage point (p) from the previous month. During this period, the lending rate for large corporations (4.13%) rose 0.04%p, and the rate for small and mid-sized corporations (4.28%) increased 0.07%p. The overall bank lending rate, including both households and corporations, was 4.26%, up 0.02%p from the previous month.
The deposit-like funding rate, including deposits and market-type financial products, was 2.83%, up 0.05%p from the previous month. The rate on pure savings deposits, such as time deposits, rose from 2.77% to 2.8%. The rate on market-type financial products such as certificates of deposit (CDs) and bank bonds increased from 2.82% to 2.97%. As funding rates rose more than lending rates, the bank new-loan handling basis loan-deposit spread (the difference between deposit and lending rates) narrowed by 0.03%p from the previous month to 1.43%.
At nonbank financial institutions, the one-year time deposits rate rose across the board, including savings banks (3→3.05%), credit unions (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 rates, only credit unions (4.55→4.54%) fell, 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%) rose.