Industrial Bank of Korea (024110) will cut mortgage rates by as much as 0.5 percentage point.
Starting on the 22nd, the bank will widen the special-agreement rate discounts it offers on mortgages and jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) loans, financial industry sources said on the 21st. For in-person mortgages on periodic-reset terms of five and 10 years, the discount will expand to 0.7 percentage point from 0.2 percentage point. Other in-person mortgages will see discounts widen by up to 0.2 percentage point. For jeonse loans, the special-agreement discount will increase by 0.3 percentage point on both fixed- and floating-rate products.
As a result, borrowers who meet conditions such as routing their salary payments through the bank or opening a credit card at the time of the loan will qualify for lower rates. An IBK official said the step was taken to ease the financial burden on household loan customers.
The rate reductions reverse tighter household lending controls the bank imposed in June. From June 30, IBK had trimmed its discount entitlement on in-person mortgages by 0.5 percentage point and cut the discount entitlement on fixed- and floating-rate jeonse loans by 0.2 percentage point to manage the overall volume of household lending.
The bank is also unwinding restrictions on loan origination. On the 15th, it resumed writing new floating-rate mortgages and refinancing mortgages held at other banks, and it began accepting mortgage and jeonse loan applications through loan agents again.
