Published : Feb. 3, 2016 - 10:47
Local banks’ lending rates on home-backed loans have regained the 3 percent level despite record low key interest rates, data showed Wednesday.
The lending rates at 14 out of 16 local lenders were over 3 percent for home-backed loans with a maturity of 10 years or longer, according to data from the Korea Federation of Banks as of the end of 2015.
Customers consult for loans at a bank in Seoul.(Yonhap)
Banks’ lending rates had dropped steadily since the Bank of Korea put its key policy rate to a record low 1.5 percent in June last year. In October, the average rate on home-backed loans fell to below 3 percent.
But lending rates began trend higher in November on expectations of a U.S. rate hike.
The U.S. Federal Reserve did in fact raise its key rate in December, marking its first rate hike since 2008. Foreign investors consequently remained net sellers of South Korean stocks for 37 consecutive sessions between Dec. 2 and last Wednesday, offloading some 6.5 trillion won ($5.4 billion) over the period and setting the longest selling record here.
Such an outflow of funds caused the banks’ own cost of securing funds for loans to go up, triggering the recent rise in home-backed loan interests.
(khnews@heraldcorp.com)