Seoul: Banks’ household mortgage loan rates rose in June for the first time in five months, despite the central bank’s monetary easing, data showed Wednesday. The average lending rate banks applied to new loans came to 4.09 percent last month, down 0.08 percentage point from a month earlier, according to the data from the Bank of Korea (BOK).

According to Yonhap News Agency, the rate has been on a constant decline since December. However, the rate for home-backed loans increased by 0.06 percentage point from a month earlier to 3.93 percent in June, marking the first increase since January, though the average rate for all fresh household loans fell by 0.05 percentage point to 4.21 percent.

BOK official Kim Min-soo explained at a press briefing that “interest rates on mortgage loans and jeonse loans rose as benchmark yields on five-year and two-year bank bonds increased.” Meanwhile, the average interest rate on corporate loans fell by 0.1 percentage point to 4.06 percent in June, reversing the increase seen in the previous month.

The rate that banks pay for deposits fell 0.08 percentage point to 2.55 percent, marking the ninth consecutive monthly decline. The spread between banks’ lending and deposit rates remained unchanged from the previous month at 1.54 percentage points in June, the data showed.

The BOK began its monetary easing cycle in October, marking its first policy shift since August 2021, and has cut its benchmark interest rate four times by a total of 1 percentage point through May in an effort to boost economic growth amid sluggish domestic demand. During the latest rate-setting meeting held earlier this month, the central bank kept the rate unchanged amid concerns about rising housing prices, household debt, and uncertainties stemming from the United States’ tariff policy.