Increase the market interest rate and increase the household loan rate

Entry 2018.11.28 12:00

Bank interest rates on household loans increased slightly, in line with the rise in market interest rates last month.

According to the Bank of Korea (BOK), announced Oct. 28, the bank lender's interest rate to households last month increased by 0.02 percentage point (p) from the previous month, for to establish at 3.64%. The interest rate on bank loans granted by banks ranged from 3.72% to 3.75% between May and July, but fell to 3.66% in August and 3.62% in September. However, market interest rates rebounded slightly last month.

All interest rates of household loans, excluding small loans of less than 5 million won, have increased. Mortgage loans to households grew by 0.03% p in one year, to 3.31%, and credit rates, from 0.06% to 4.45%. Group loans (3.45% per annum) and secured loans (3.57% pa) increased by 0.05% p and 0.01% p, respectively. Yes, the interest rate on mortgages (3.23% per annum) increased by 0.01% p, but the interest rate on microcredit (4.42% per annum) decreased by 0, 22% p.

Business lending rates also increased from 0.03% p to 3.65% pa. The lending rate of large companies increased by 0.21% p, reaching 3.42%. The Bank of Korea (BOK) said its lending rate to large companies has risen sharply due to the bank's management of high-rate loan products for large companies. On the other hand, the interest rate on loans to SMEs decreased by 0.04% p, to 3.84%.

Savings rates on deposits last month increased from 1.93% to 0.09% p over the previous month. This is the effect of banks managing high-interest products to attract fixed deposits while market interest rates are rising. As a result, interest-bearing interest rates decreased from 0.06% p to 1.71% p. This is the lowest level in three years and six months since April 2015 (1.58% p).

In the case of non-bank financial institutions, the interest rate on mutual finance loans with mutual savings banks has increased, but the interest rate on credit unions and Saemaul loans has decreased. Mutual savings funds grew by 0.25% p (10.59% → 10.84%) and mutual financing by 0.03% p (4.07% → 4.10%). On the other hand, the interest rates of the credit unions (4.84% → 4.81%) and the Saemaeul bank (4.38% → 4.33%) decreased by 0.03% p and 0, 05% p respectively.