Mortgage Upper Limit of 8% 'Dangerous'... Even Bogeumjari Loan Interest Rates Are Rising

As mortgage interest rates continue to rise, the burden on borrowers is increasing.
5% and additional spreads on the Bogeumjari Loan for non-homeowners also rising, the sighs of real demanders planning to purchase a home in the second half of the year are deepening. According to the financial sector on the 21st, the upper limit of mortgage rates at the five major banks has approached 8%. With the lowest rates also nearing 5%, the burden on borrowers is expected to increase further. 56% per annum.
This means that even borrowers who secure a loan at the lowest fixed rate must bear interest payments close to 5% per annum. 46%p in just two months. This is due to the upward trend in market interest rates. 478% now.
Variable-rate mortgage interest rates are also rising. 82% per annum. 79 percentage points. This is due to the rise in COFIX, the benchmark for variable interest rates.
15 percentage points compared to May. Interest rates for the Bogeumjari Loan, a representative policy finance product, are also soaring. 1 percentage points starting on the 30th. 1%p additional interest rate spread in regulated areas last May.
2%. The Bogeumjari Loan is a policy mortgage loan provided to non-homeowners and others purchasing a home priced at 600 million won or less, with a combined annual spousal income of 70 million won or less. The move to raise interest rates is intended to regulate demand as commercial bank mortgage rates have risen rapidly and lending thresholds have become higher due to total volume regulations, causing demand to surplus in policy mortgages. 3286 trillion won, already meeting nearly 60% of the annual supply target (20 trillion won).
An official from the Korea Housing Finance Corporation (KHFC) explained, "We decided to raise the additional interest rate for regulated areas to support borrowers in greater need of the limited supply of Bogeumjari Loans. " With Bogeumjari Loan interest rates already exceeding 5% per annum, the burden on low-income real demanders is expected to increase further with the addition of additional interest rates. 90% per annum). 20% for the 50-year term.
This marks the first time Bogeumjari Loan rates have surpassed 5% in three years and seven months, since December 2022. With rates rising five times this year alone—in January-February, April-May, and July—critics point out that the threshold for policy financing is becoming increasingly high. As loan demand shows little sign of abating, the banking sector also anticipates that it will be difficult to lower lending thresholds.
With mortgage interest rates expected to continue rising in line with the trend of raising the base interest rate, borrowers' interest burden is projected to increase further in the second half of the year. "With the stock market stagnating, investment funds are shifting to real estate, and demand for purchasing homes using corporate performance bonuses is also increasing, leading to a concentration of mortgage loans," said a banking industry official. "Given the need to manage the total volume of household loans, it is difficult to expand preferential interest rates or raise limits again in the second half of the year.
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[email protected] Seo Ji-yoon Lee Ju-mi Reporter