Sat, Mar 23, 2013 - Page 13 News List

Interest rates on housing loans hit record high

By Amy Su  /  Staff reporter

The average interest rate on new housing loans of five leading banks hit its highest level in more than four years last month at 1.969 percent, as lenders continued to raise interest rates to tighten housing loans under supervision of the Financial Supervisory Commission (FSC), a report by the central bank showed yesterday.

The Bank of Taiwan (台灣銀行), Taiwan Cooperative Bank (合作金庫銀行), Land Bank of Taiwan (土地銀行), Hua Nan Commercial Bank (華南商業銀行) and First Commercial Bank (第一銀行) adopted the housing loans with an average interest rate of 1.969 percent, up 0.022 percentage points from January and marking the highest level since January 2009, the central bank said in a report.

Chen E-dawn (陳一端), deputy head of the bank’s economic research department, attributed the rate’s rise to the five banks’ strategy to “increase prices to limit quantity,” because the quota of housing loans they are allowed to undertake is limited by the Banking Act (銀行法).

Meanwhile, the five leading banks in Taiwan made NT$25.71 billion (US$862.30 million) in new housing loans last month, its lowest level since February 2008.

This was mainly due to fewer working days last month as a result of the Lunar New Year holidays, the report said.

However, combining data from the first two months still showed a double-digit growth from a year earlier, in line with the trend in new housing loans, Chen said, citing data from the Ministry of the Interior.

The central bank keeps watching domestic banks’ risk control for housing loans to prevent speculative transactions in the property market, she added.

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