Bank lending rates on mortgages fall in April after 6-month upward trend

An advertisement for a mortgage loan hangs in front of a financial institution in Seoul on May 24. [YONHAP]

 

Banks’ household mortgage loan rates fell in April, ending a six-month upward trend, amid tighter regulations aimed at stabilizing the housing market, data showed Friday.

 

The average interest rate on new bank loans stood at 4.2 percent last month, unchanged from a month earlier, according to the data from the Bank of Korea (BOK).

 


The average rate on corporate loans also stayed flat at 4.2 percent, while the rate on new household loans dropped 0.08 percentage point to 4.43 percent.

 

In particular, the average rate on household mortgage loans declined 0.03 percentage points, snapping a six-month rising streak that began in October last year.

 

The government has imposed stricter rules on home purchase loans to cool the overheated property market and rein in household debt.

 

At its latest rate-setting meeting earlier this month, the central bank kept its benchmark interest rate unchanged for the seventh consecutive meeting, as uncertainty in the Middle East prompted a cautious stance amid risks of inflation, currency weakness and slower growth.

Yonhap