Mortgage Fixed Rates Top 7%... Highest in 3 Years and 5 Months

As market interest rates rise due to geopolitical instability in the Middle East, fixed mortgage rates at major commercial banks have broken the 7% mark. According to the financial sector on the 27th, the mixed (fixed) mortgage rates for KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup banks, based on 5-year bank bonds, were tallied at the level of 4.410% to 7.010% per annum. It is the first time since October 2022, 3 years and 5 months ago, that the fixed rates of the top five banks have exceeded 7%.

This indicates that loan interest rates have risen to a level comparable to the peak of the Bank of Korea's interest rate hike cycle, which began in August 2021 to stabilize prices. This could increase the interest burden on borrowers and affect household finances.

Market interest rates, which serve as the benchmark for bank loan rates, have been steadily increasing since the latter half of last year. Recently, the pace of market interest rate hikes has accelerated again due to growing concerns about inflation caused by the Middle East situation. Rising oil prices due to the Middle East conflict could rekindle inflation expectations.