Banks' household mortgage lending rates up for 5th month in Sept.

Banks in South Korea reported a surge in household mortgage loan rates for the fifth straight month in September, according to central bank data released Thursday. The average interest rate on new bank loans climbed to 4.57 percent last month, a 0.17 percentage point increase from the previous month. Meanwhile, corporate loan rates also rose by 0.19 percentage points to 4.49 percent.

Household loan rates experienced the most significant jump, with an increase of 0.14 percentage points, bringing the average rate to 4.96 percent in September. The Bank of Korea (BOK) maintained its benchmark interest rate at 3 percent last week, following two consecutive rate hikes aimed at tackling persistent inflation driven by ongoing geopolitical tensions in the Middle East and strong economic growth.

This decision marked the first time the BOK had increased the benchmark rate twice in a row since January 2023, when the central bank conducted seven consecutive meetings to raise the rate, beginning in April 2022.