Home money Banks raise loan interest rates to meet household loan regulations… October 0.28%p↑

Banks raise loan interest rates to meet household loan regulations… October 0.28%p↑

by drbyos
Source = Bank of Korea


[이코노믹리뷰=황대영 기자] It has been found that deposit banks have significantly raised interest rates on household loans in response to the government’s regulations on household loans. In particular, the interest rate on household loans has more than doubled compared to the rate of increase in the receiving rate.

According to the ‘Weighted Average Interest Rate for Financial Institutions in October 2021’ announced by the Bank of Korea on the 26th, the interest rate for savings-type receipts based on new transactions in October was 1.29% per annum, 0.12 percentage points (p) from the previous month, and the loan interest rate was 3.07% per annum. It rose 0.11%p from the previous month. The difference between the loan rate and the savings rate was 1.78%p, down 0.01%p from the previous month.

However, during the same period, household loans among loan rates rose by 0.28 percentage points from the previous month to 3.46 percent per annum. Among them, the interest rate for mortgage loans was 3.26% per annum, up 0.25%p from the previous month. It is correct that the market pointed out that the interest rate on loans rose faster than the interest rate on deposits. It is analyzed that the bank first raised the loan interest rate while the government blocked the loan amount system in order to reduce the rapidly increasing household debt.

The total receiving interest rate based on the balance at the end of October was 0.73% per annum, up 0.04%p from the previous month, and the total loan interest rate was 2.89% per annum, up 0.06% from the previous month. As a result, the difference between the total loan interest rate and the total receiving rate based on the balance increased by 0.02%p from the previous month to 2.16%p.

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During the same period, the deposit rates of non-bank financial institutions (based on one-year term deposits) and loan rates rose in all but mutual savings banks.

For mutual savings banks, the deposit rate fell by 0.01%p from the previous month to 2.36% per annum, and the loan rate fell by 0.07%p to 9.47% per annum. On the other hand, for credit unions and mutual finance Saemaul Geumgo, deposit rates rose by 0.07%p, 0.03%p, and 0.06%p, respectively, and loan rates rose by 0.07%p, 0.07%p, and 0.01%p, respectively.

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