Bank mortgage rates hit their highest level in 7½ years in December

The Bank of Korea headquarters in central Seoul (Yonhap)

South Korean bank mortgage rates hit their highest level in about 7½ years in December amid rising borrowing costs, central bank data showed on Friday.

The bank mortgage rate averaged 3.63% a year in December, 0.12 percentage point higher than a month earlier and the highest since May 2014, Bank of China data showed. Korea (BOK).

Mortgage rates have risen as the BOK raised the key rate in recent months as part of efforts to tighten its long accommodative policy put in place to cushion the fallout from the pandemic.

On January 14, the BOK raised the benchmark interest rate by a quarter of a percentage point to 1.25%, the third hike in the pandemic era after increases in August and November of the year. last.

The central bank has hinted at further rate hikes in the coming months.

The bank’s unsecured lending rate, however, edged down 0.04 percentage point to 5.12% last month after jumping 0.54 percentage point the previous month.

The average interest rate on loans to households reached 3.66% in December against 3.61% the previous month. It was still the highest since August 2018.

Along with the lending rate hikes, bank deposit rates also rose to 1.7% in December from 1.57% the previous month. The deposit rate marked the highest since June 2019, when the rate stood at 1.79%. (Yonhap)

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