Hana Bank to Suspend MCI Enrollment... Mortgage Loan Tightening Spreads

Rate and Loan Limit Adjustments at Major Commercial Banks

Hana Bank has further tightened its mortgage loan requirements, signaling a broader trend among major commercial banks to restrict access to home-backed lending.

According to the financial sector on June 25, Hana Bank will temporarily suspend the issuance of Mortgage Credit Insurance (MCI) and Mortgage Credit Guarantee (MCG) policies starting from July 1.

MCI and MCG are insurance products typically taken out at the same time as a mortgage loan. If borrowers do not purchase these policies, they can only borrow an amount that excludes the small lease deposit, resulting in a reduced loan limit. For apartments in Seoul, the maximum loan amount is expected to decrease by about 55 million won, while for those in Gyeonggi Province, it is expected to decrease by about 48 million won.

A notice is posted at the Hana Bank branch. Photo by Dongju Yoon

Recently, banks have been continuously tightening their mortgage loan criteria. KB Kookmin Bank stopped offering mortgage loan preferential rate coupons on June 18. Starting June 26, it will also restrict loans that are contingent upon repayment to other banks, and suspend applications for refinancing from other banks to KB Kookmin Bank.

Interest rate hikes are also ongoing. Starting June 30, IBK Industrial Bank of Korea will reduce its in-person mortgage loan (excluding balloon-type) interest rate discount by 0.5 percentage points. The interest rate reduction for both fixed and variable-rate jeonse loans will be lowered by 0.2 percentage points. The special (automatic) discount for the i-ONE Smart Loan for office workers will be reduced by 0.3 percentage points. When these discounts are reduced, the final loan interest rate rises accordingly.

NH NongHyup Bank raised its five-year fixed-rate and six-month variable-rate mortgage loan interest rates by 0.2 percentage points each earlier this month. In addition, since June 15, it has cut its preferential rates for both credit loans and mortgage loans by 0.1 percentage points and 0.2 percentage points, respectively.

Woori Bank will end the preferential interest rate offered on its main mortgage product, Woori Apartment Loan, which was provided as part of inclusive finance, in July. The interest rate for five-year variable-rate mortgage loans will also increase by 1.1 percentage points starting next month.

This content was produced with the assistance of AI translation services.