Korean banks' lending rates dropped to a record low in June, mainly due to falling mortgage rates, the central bank said yesterday.
The average rate for new loans extended to households and companies reached 5.32 percent last month, down 0.08 percentage point from a month earlier, according to the Bank of Korea (BOK). It marked the lowest level since January 1996 when the central bank began to compile related data.
The average lending rate for households reached a record low of 5.15 percent in June, driven by falling home-backed lending, it added. Mortgage loan rates also hit an all-time low of 4.62 percent, down 0.16 percentage points from the previous month.
The downward trend came as the central bank froze its key interest rate at a record low of 2 percent in June and lenders introduced in February a new benchmark, called the Cofix, to set their rates on mortgage loans, reflecting their various funding costs, a BOK official said.
The BOK hiked the key benchmark interest rate in July. (Yonhap)
(Source: JoongAng Daily)
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