IBK to Cut Mortgage Rate by 0.5% Points
By Kim Jae-won
Staff Reporter
The Industrial Bank of Korea (IBK) said Monday that it will reduce mortgage interest rates by up to 0.5 percentage points from January.
With the reduction, interest rates on fresh mortgages extended by the lender will be reduced to 4.41 percent to 5.51 percent from the current 4.91 percent to 6.01 percent.
"We decided to slash borrowing costs for mortgages as part of efforts to reduce the financial burden for those in the low-income bracket. We estimate that more than 100,000 will take advantage of the cuts,’’ an IBK official said.
The lender also decided to cut interest rates on overdue home loans from 21 percent to 18 percent for one year from January.
With the state lender’s surprise rate cuts, other lenders are likely to follow suit. Most of them said that they have yet to make any decision but chances are that they will cut rates soon to get the upper hand in the post-crisis competition.
"We cannot make any comment on mortgage interest at this moment. All I can say is that we will determine the course of rates depending on the market situation,’’ a Shinhan Bank official said.
Kookimin Bank, the largest lender in the nation, also declined to comment on the issue, saying that nothing has yet been decided.