Bank household lending rates reached their highest level in almost nine years in June

Seoul, July 29 (Yonghap)-Banks’ average lending rates on Korean fresh mortgages have risen to their highest levels in almost nine years in June as central banks raise rates to combat rising inflation. The data showed on Friday.

According to data from the Bank of Korea (BOK), the average rate of household loans provided by banks was 4.23% per annum in June, up 0.09 points from the previous month.

June figures hit a record high since September 2013 at 4.26%.

According to data, mortgage rates in June rose 0.14 percentage points month-on-month to 4.04 percent, the highest since February 2013 at 4.06 percent.

Interest rates on unsecured loans rose 0.22 percentage points to 6 percent, the highest since August 2013 at 6.13 percent.

BOK said rising policy rates pushed up lending rates.

This increase is in line with BOK’s recent move to raise the policy rate to curb rising inflationary pressures.

BOK has raised its key policy rate six times since August last year, rising 0.5 percentage points to 2.25% this month.

According to BOK, borrowers implemented more fixed rate plans in June in anticipation of future major interest rate hikes.

Fixed rate plans accounted for 18.4% of all household loans extended in June, up 1 point from a month ago.

In the same month, corporate lending rates in June rose 0.24 points to 3.84%. Lending rates for large and small businesses rose 0.24 percentage points and 0.27 percentage points, respectively.

Interest rates on bank deposits rose 0.39 percentage points last month to 2.41 percent, the highest since July 2014. Bank household lending rates reached their highest level in almost nine years in June

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