Spread Rates on Mortgage Loans at Top 5 Banks Remain High Amid Household Loan Curb

Major commercial banks have been found to maintain high levels of spread rates as they tighten the management of total household loans.

According to the Korea Federation of Banks on Monday (August 17), the average spread rate for amortized mortgage loans newly handled by the five major banks (KB Kookmin, Shinhan, Woori, Hana, and NH Nonghyup) in June stood at 3.27 percent, up 0.04 percentage points from the previous month (3.23 percent).

This marks the highest level since relevant statistics began being compiled in July 2019.

Banks calculate loan interest rates by adding a spread rate to the benchmark rate.

This spread rate is determined by reflecting operating costs, legal expenses, risk premiums, and adjusted interest rates.

By bank, NH Nonghyup Bank recorded the highest spread rate at 3.93 percent, followed by Hana Bank at 3.50 percent, Woori Bank at 3.36 percent, KB Kookmin Bank at 3.13 percent, and Shinhan Bank at 2.41 percent.

Meanwhile, the loan-to-deposit interest rate gap for mortgage loans under the same conditions handled by the five major banks decreased by 0.08 percentage points, from an average of 1.56 percent in May to 1.48 percent in June.

An official from a commercial bank explained, "There is an aspect of maintaining high spread rates in the process of suppressing mortgage loans to manage the total volume of household loans," adding, "As deposit rates rose, the loan-to-deposit interest rate gap actually narrowed."
※ Please note: This article was translated by AI and may contain errors.