Mortgage rate reached 9-month high on CD rise

SEOUL, Sept. 25 (Yonhap) -- Mortgage rates at most commercial banks in South
Korea reached a 9-month high on the rise of certificate of deposit (CD) interest
rates, deepening the burden on households and business, according to industry
sources Friday.
Industry data showed yearly interest rates on mortgage loans broke the 6-percent
mark at most commercial banks.
Woori Bank, the second largest lender, charged interest rates between 5.2
percent and 6.02 percent for yearly mortgage loans.
The fifth largest lender controlled by the U.S. funds Lone Star, Korea Exchange
Bank (KEB) offered mortgage loans with the yearly interest rates ranging from
4.92 percent to 6.47 percent.
The top lender Kookmin Bank, which posts its interest rates weekly, is expected
to raise interest rates by 0.13 percentage point next week.
The rise on mortgage rates, which would impose strains on household and business,
is ascribed to the recent hike in CD rates, which rose to a 9-month high.
The benchmark 91-day CD rates stood at 2.72 percent as of Friday, up 0.31 percent
from Aug. 5. The CD rates rose for 11 consecutive days until Thursday, the
longest streak of gains since Oct. 24 last year.
Samsung Economic Research Institute, in a separate report released recently, said
Korean households are predicted to shoulder 6 trillion won (US$5.02 billion) in
interest rates during the first quarter in 2010 when the central bank is expected
to raise the key rate.
ylee@yna.co.kr
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