Most Popular
-
1
K-pop group's manager dismissed for setting up spycam in theater dressing room
-
2
Contentious grain bill put directly to plenary meeting for vote
-
3
Why is Apple Pay struggling to get purchase in Korea?
-
4
Will tug-of-war between doctors, government end soon?
-
5
Climate impacts set to cut 2050 global GDP by nearly a fifth
-
6
Trilateral talks acknowledge ‘serious’ slumps of won, yen
-
7
[Today’s K-pop] BTS pop-up event to come to Seoul
![[Today’s K-pop] BTS pop-up event to come to Seoul](//res.heraldm.com/phpwas/restmb_idxmake.php?idx=644&simg=/content/image/2024/04/17/20240417050734_0.jpg&u=)
-
8
Yoon's approval rating plunges to all-time low
-
9
[Graphic News] More Koreans say they plan long-distance trips this year
![[Graphic News] More Koreans say they plan long-distance trips this year](//res.heraldm.com/phpwas/restmb_idxmake.php?idx=644&simg=/content/image/2024/04/17/20240417050828_0.gif&u=)
-
10
Mother of student activist, whose death sparked pro-democracy movement, dies
![[Today’s K-pop] BTS pop-up event to come to Seoul](http://res.heraldm.com/phpwas/restmb_idxmake.php?idx=644&simg=/content/image/2024/04/17/20240417050734_0.jpg&u=)
![[Graphic News] More Koreans say they plan long-distance trips this year](http://res.heraldm.com/phpwas/restmb_idxmake.php?idx=644&simg=/content/image/2024/04/17/20240417050828_0.gif&u=)
Weighed down by the government-led loan transfer program last month, local banks are increasing the interest charges for their fixed-rate mortgages and placing more focus on floating-rate products.
Borrowers now have either to bear a higher fixed rate or take the risk of future rate hikes, which has led to complaints that banks are attempting to shift their financial burden onto consumers.
According to industry officials on Monday, major banks here upped their housing mortgage fixed rate by up to 0.53 percentage point compared to the end of March, before the loan transfer program was implemented in early April.
Their floating rates, however, fell by up to 0.57 percentage point during the same period.
The most conspicuous change was led by KB Kookmin Bank, which leads the local housing loan market. The bank raised its fixed rate by 0.33-0.53 percentage points and dropped its floating rate by 0.22-0.57 percentage points, depending on the loan type, period, borrower’s credit rating and collateral.
Woori Bank, too, raised its fixed rate by 0.34 percentage point and lowered its floating rate by 0.12 percentage point. Industrial Bank of Korea and agricultural cooperative-based NH NongHyup Bank also upped their fixed rate by 0.1 and 0.28 percentage points, respectively.
Directly hit by this sudden rate hike are those who were planning to take the 1 percent-range mortgage loan, a plan which was canceled in order to give way to the loan transfer program.
“Considering the rate risks, it is only natural for commercial banks to prefer floating rate loan products,” said an official of one of the banks.
“Customers who are seeking to take new loans at this point in time may have their complaints, but in fact, the loan transfer program was introduced in April as a temporary, extraordinary benefit with limited of scope.”
In early April, the government implemented a housing mortgage loan transfer plan, allowing more than 340,000 conventional loan borrowers to switch to long-term, low-rate loans. The plan is expected to cut down the banking industry’s net profits by hundreds of billions of won this year.
By Bae Hyun-jung (tellme@heraldcorp.com)
Borrowers now have either to bear a higher fixed rate or take the risk of future rate hikes, which has led to complaints that banks are attempting to shift their financial burden onto consumers.
According to industry officials on Monday, major banks here upped their housing mortgage fixed rate by up to 0.53 percentage point compared to the end of March, before the loan transfer program was implemented in early April.
Their floating rates, however, fell by up to 0.57 percentage point during the same period.
The most conspicuous change was led by KB Kookmin Bank, which leads the local housing loan market. The bank raised its fixed rate by 0.33-0.53 percentage points and dropped its floating rate by 0.22-0.57 percentage points, depending on the loan type, period, borrower’s credit rating and collateral.
Woori Bank, too, raised its fixed rate by 0.34 percentage point and lowered its floating rate by 0.12 percentage point. Industrial Bank of Korea and agricultural cooperative-based NH NongHyup Bank also upped their fixed rate by 0.1 and 0.28 percentage points, respectively.
Directly hit by this sudden rate hike are those who were planning to take the 1 percent-range mortgage loan, a plan which was canceled in order to give way to the loan transfer program.
“Considering the rate risks, it is only natural for commercial banks to prefer floating rate loan products,” said an official of one of the banks.
“Customers who are seeking to take new loans at this point in time may have their complaints, but in fact, the loan transfer program was introduced in April as a temporary, extraordinary benefit with limited of scope.”
In early April, the government implemented a housing mortgage loan transfer plan, allowing more than 340,000 conventional loan borrowers to switch to long-term, low-rate loans. The plan is expected to cut down the banking industry’s net profits by hundreds of billions of won this year.
By Bae Hyun-jung (tellme@heraldcorp.com)
-
Articles by Korea Herald
![[KH Explains] Hyundai's full hybrid edge to pay off amid slow transition to pure EVs](http://res.heraldm.com/phpwas/restmb_idxmake.php?idx=652&simg=/content/image/2024/04/18/20240418050645_0.jpg&u=20240419100350)
