Mortgage rates have increased for the third consecutive month, while deposit rates have risen for four months, reaching 3.2%.
According to the Bank of Korea's 'Weighted Average Interest Rate' statistics released on August 26, the weighted average mortgage rate for new loans at deposit banks in July was 4.48%, up 0.12 percentage points from the previous month. This marks the highest level since November 2023.
The overall household loan rate rose to 4.64%, an increase of 0.14 percentage points. The rate for general credit loans climbed to 5.97%, up 0.25 percentage points, the highest since December 2024. The rate for jeonse loans also increased by 0.12 percentage points to 4.19%.
The proportion of fixed-rate mortgages fell to 31.9%, a decrease of 5.8 percentage points from the previous month. This marks the lowest level since February 2014, continuing a nine-month decline since November of last year.
The share of fixed-rate loans among all household loans also decreased to 21.0%, down 1.7 percentage points, reaching the lowest level since May 2022 after 12 consecutive months of decline.
Kim Sung-jun, head of the Bank of Korea's Financial Statistics Team, explained, "The higher fixed rates compared to variable rates have led consumers to opt for lower immediate rates, resulting in a reduced share of fixed-rate loans."
In July, corporate loan rates decreased from 4.27% to 4.20%. The rate for large corporate loans rose slightly to 4.18% due to an increase in short-term market rates, while the rate for small and medium-sized enterprises fell to 4.22%, aided by preferential rates to expand corporate lending.
The interest rate for savings deposits (based on new transactions) rose to 3.21%, an increase of 0.13 percentage points, marking four consecutive months of growth.
The rates for pure savings deposits, such as time deposits (3.16%), and market-based financial products like financial bonds and certificates of deposit (3.48%) rose by 0.14 percentage points and 0.12 percentage points, respectively.
The interest rate spread between new loan rates and savings deposit rates narrowed to 1.06 percentage points, down 0.17 percentage points from the previous month, marking a six-month consecutive decline. The balance-based interest rate spread decreased to 2.22 percentage points, down 0.05 percentage points from the previous month.
Regarding future interest rate trends, Kim stated, "Long-term rates have fallen, while short-term rates are rising as of August 22. Although rates dropped until early August, they are expected to rise thereafter, reflecting this trend."
* This article has been translated by AI.
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