![\"null](\"https:\/\/www.europesays.com\/korea\/wp-content\/uploads\/2026\/06\/news-g.v1.20260608.fb13347afb634a669ebc9ecc45df0310_P1.jpg\"\/ "\\"Korean")
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Korean banks are moving to raise interest rates. Financial bond yields have surged to the mid-4% range this year, while the possibility of an additional rate hike by the Bank of Korea is being discussed. Commercial banks are raising mortgage rates. Deposit rates have also climbed into the 3% range, reigniting competition for deposits.<\/p>\n
According to the financial industry on Monday, KB Kookmin Bank lowered the variable preferential rate based on the new-balance Cost of Funds Index (COFIX) six-month rate by 0.2 percentage point for its non-face-to-face mortgage product “KB Star Apartment Mortgage” the previous day. With the reduction in the preferential rate, the actual applied rate rose above the previous level.<\/p>\n
As a result, the rate on the product rose from an annual 3.62-4.12% to 3.82-4.32%. The rate on the variable “KB Star Apartment Mortgage II” product was also revised upward from 3.52-4.92% to 3.72-5.12%.<\/p>\n
NH NongHyup Bank also raised its mortgage rates for the five-year fixed and six-month variable products by 0.2 percentage point each, effective from the first of the month. Jeonse loan rates and credit loan rates were also adjusted. The upper limits of the six-month variable products rose by 0.32 percentage point and 0.12 percentage point, respectively.<\/p>\n
At Woori Bank, the effect of a rate increase emerged due to the end of a preferential rate special offer. The minimum rate on the new COFIX six-month variable version of its flagship mortgage product “Woori Apartment Loan” rose 0.70 percentage point from an annual 3.67% to 4.37%. This was due to the depletion of the entire allotment of the 0.7 percentage point preferential rate that had been operated on a temporary basis. Currently, only the five-year variable rate allotment, which applies a 0.3 percentage point preferential rate, remains.<\/p>\n
The banking industry cites the surge in financial bond yields this year as the background for the recent rise in mortgage rates. The yield on five-year maturity AAA-rated financial bonds, which serves as the benchmark for calculating mortgage rates, stood at around 3.499% at the end of last year but recently exceeded the 4% range. After recording 4.051% at the end of March, it rose to 4.413% on the fifth of this month.<\/p>\n
Analysts say geopolitical risks in the Middle East, rising U.S. Treasury yields, and the possibility of additional tightening by the Bank of Korea have had a combined effect. As a result, the upper limit of the five-year fixed mortgage rates at the five major banks recently exceeded an annual 7%.<\/p>\n
By contrast, Shinhan Bank and Hana Bank have not yet implemented separate measures to raise mortgage rates. However, the banking industry sentiment is that the possibility of additional adjustments remains open depending on the trend of market rates. “Upward pressure on market rates continues, so it is difficult to rule out the possibility of adjusting loan rates going forward,” an official at one commercial bank said.<\/p>\n
Deposit rates are also rising. According to the Korea Federation of Banks, more than half of the one-year fixed deposit products at 19 banks were offering a maximum annual rate of 3% or higher as of Monday. All three internet banks were also offering rates in the 3% range. BNK Busan Bank began selling its “BNK My Way Deposit” special offer, which provides a maximum annual rate of 3.4%, on Monday. The total limit is 1 trillion won.<\/p>\n
The banking industry believes that rising deposit rates could further intensify pressure to raise loan rates. “When deposit rates rise, funding costs increase, so this inevitably affects loan rates as well,” an official in the banking industry said. “There is a high possibility that the upward trend in banks’ deposit and lending rates will continue for the time being.”<\/p>\n","protected":false},"excerpt":{"rendered":"Korean banks are moving to raise interest rates. Financial bond yields have surged to the mid-4% range this…\n","protected":false},"author":2,"featured_media":46236,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[456],"tags":[845,1833,846,26952,26953,27282,5177,26949,1344,26950],"class_list":["post-46235","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bank-of-korea","tag-bank-of-korea","tag-bank-of-korea-rate-hike","tag-bok","tag-cofix","tag-deposit-rates","tag-financial-bond-yields","tag-kb-kookmin-bank","tag-korea-mortgage-rates","tag-korean-banks","tag-nh-nonghyup-bank"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/46235","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=46235"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/46235\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/46236"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=46235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=46235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=46235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}