SEOUL, September 30 (AJP) — South Korea's average mortgage rate rose to 4.66 percent in August, its highest since November 2022, as borrowing costs increased across household and corporate loans, central bank data showed Wednesday.
According to data released by the Bank of Korea (BOK), the average rate on new household loans rose 0.12 percentage point from July to 4.76 percent. Mortgage rates climbed 0.18 percentage point to 4.66 percent, extending their rise for a fourth consecutive month.
Rates on unsecured personal loans jumped 0.36 percentage point to 6.33 percent, while Jeonse loan rates rose 0.16 percentage point to 4.35 percent. Jeonse is a rental system unique to South Korea in which tenants pay the landlord a large lump-sum deposit, often more than half the home's value, which is returned in full when the lease ends.
Both fixed- and variable-rate mortgages became more expensive, with the fixed rate rising to 4.88 percent from 4.76 percent and the variable rate to 4.53 percent from 4.35 percent. The fixed mortgage rate has risen for 11 consecutive months since October 2025.
The share of fixed-rate mortgages rose to 35.3 percent from 31.9 percent, marking its first increase in 10 months as the share of variable-rate lending declined. Across all household loans, the fixed-rate share rose to 23.5 percent from 21.0 percent, its first increase in 13 months.
Corporate borrowing costs also increased, with the average corporate lending rate rising 0.10 percentage point to 4.30 percent. Rates for large companies edged up 0.03 percentage point to 4.21 percent, while those for small and medium-sized enterprises rose 0.16 percentage point to 4.38 percent.
The BOK said higher short-term market rates, including three-month certificates of deposit and short-term bank bonds, contributed to the increase in corporate lending rates.
Across all newly issued bank loans, the average lending rate rose 0.13 percentage point to 4.40 percent, while the average rate on new savings deposits remained unchanged at 3.21 percent.
The gap between lending and deposit rates consequently widened to 1.19 percentage points from 1.06 percentage points, marking its first increase in seven months.
On an outstanding-balance basis, however, the average lending rate rose 0.03 percentage point to 4.40 percent and the average deposit rate increased 0.05 percentage point to 2.20 percent, narrowing the spread to 2.20 percentage points from 2.22 percentage points.
Among nonbank institutions, deposit and lending rates fell at savings banks but rose at credit unions, mutual finance companies and community credit cooperatives.
AJP Takeaways
- Korea's average mortgage rate rose to 4.66 percent in August, its highest since November 2022 and the fourth straight monthly increase.
- Unsecured personal loan rates jumped 0.36 percentage point to 6.33 percent, while household lending rates rose to 4.76 percent.
- The spread between new bank lending and deposit rates widened for the first time in seven months as lending rates rose while savings deposit rates held steady.
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