Bank of Korea Raises Base Rate to 2.75%... Loan Rates Surpass Early 7% Range

The Bank of Korea raised the base rate by 0.25 percentage points from 2.50% to 2.75%. Consequently, the upper limit for fixed-rate mortgage rates at the five major commercial banks is approaching 7.5%.

If loan rates rise by 0.25 percentage points, the annual interest burden is estimated to increase by 296,000 won for mortgage borrowers and 560,000 won for self-employed individuals.

BOK Governor Rhee Chang-yoo stated that he is keeping all options open regarding the possibility of an additional rate hike in August. Park Sang-hyun, a senior researcher at iM Securities, assessed that the possibility of a rate hike must remain on the table until the first quarter of next year.