Home mortgage loans are expected to fall to 1% per annum next month as soon as the minimum interest rate is reached.

According to the banknote, KB Kookmin, Woori, and NH Nonghyup Bank lowered the floating interest rate (linked to COPIX) of new mortgage loans that they handled yesterday (16th) by 0.14 percentage points (p) at the same time.

As a result, the range of variable interest rates for each mortgage loan has been revised down to ▲ 2.26 to 3.76% ▲ Woori Bank 2.56 to 4.16% ▲ Nonghyup Bank 2.13 to 3.74%.

COFIX (COFIX, Fund Raising Expenditure Index) is a weighted average interest rate of funds raised by 8 banks in Korea, and reflects changes in the interest rate of received products such as deposits, savings, and bank bonds actually handled by the bank.

The fact that the COPIX (1.06%) based on the new handling amount in May fell 0.14 percentage points (p) from April (1.2%), which means that the bank can raise money with less interest.

As the rate of procurement is lowered, of course, the loan rate (linked to COPIX) must be lowered.

Moreover, this trend of interest rate cut is expected to continue for the time being.

This is because the BOK cuts the base rate by 0.75 percentage points (1.25 → 0.75 → 0.5%) twice in two months since March, and the procurement rate (market rate) of banks is also lowering.

Looking at the regular deposit interest rate, which is the representative receiving product of banks, most banks except Hana Bank have lowered by 0.3~0.4% points in the past two weeks.

Therefore, it is certain that the COPIX, which will be released in the middle of next month, will reflect the interest rate received this month and will drop further than May.

If the decline in the COPIX in June is the same as in May (0.14%p), the Agricultural Cooperative's 2.13%, the lowest level of the current mortgage rate, will drop to 1.99%.

Not only is it the lowest ever, but also the walls of the variable rate of 2% mortgage loans that have been maintained for a year or two have collapsed.

An official at Shinhan Bank predicted that, due to the current decline in the interest rate, it is highly likely that the next month or so, the floating interest rate linked to COPIX will reach the 1% level.

An Nonghyup Bank official also explained, "The bank's added interest rate should always be constant, so if the interest rate falls by 0.2%p, the bottom of the actual loan rate will have to drop 0.2%p."
Of course, the lowest level of a mortgage loan has reached 1%, but not everyone can get a loan at a rate of 1%.

This is because the minimum interest rate is the maximum applied rate, which is subject to conditions such as parent households, disabled households, multicultural households, multi-child households, newlywed households, and farmers (Nonghyup Bank).

An official from Kookmin Bank said, "It can be said that the era of 1% loan mortgage interest rate is imminent." However, even if the minimum section enters the 1% zone, this is the case when all the preferential interest rates are paid. It should be considered that interest rates of 0.2 to 0.3 percentage points higher are applied to it.

There is also a concern that if the mortgage rate falls to 1%, more money will flow into the real estate market.

An official from a commercial bank said, "The difference between the 2% and 1% ranges is not large, but symbolically, the interest rate of a 1% loan is likely to stimulate interest in real estate investment." Loan regulations are strong and additional measures are expected, so home mortgage loans will not surge."