The average interest rate of new housing loans from the nation’s five major mortgage providers last month fell for the fourth consecutive month to a multiyear low, as banks are under pressure to offer cheaper loans.
The average mortgage rate of the five providers — Bank of Taiwan (台灣銀行), Land Bank of Taiwan (土地銀行), Taiwan Cooperative Bank (合作金庫銀行), Hua Nan Commercial Bank (華南銀行) and First Commercial Bank (第一銀行) — dropped to 1.620 percent, 0.004 percentage points lower than the 1.624 percent in June, central bank data released yesterday showed.
Competing for consumers in an already crowded market accounted for the declining mortgage rates last month, as self-occupancy continued to hold the housing market up, the central bank said.
The lowest mortgage rate was last recorded in May 2010, when the figure reached 1.616 percent, the central bank said.
Mortgage rates are primarily tied to short-term rates, which the central bank has kept unchanged since September 2016.
The five banks’ data are used to gauge the overall health of the nation’s property market, as their combined loans account for about 40 percent of the total mortgages extended by local lenders.
Housing loans by the five state-run banks last month dropped 0.46 percent month-on-month, but rose 5.84 percent year-on-year to NT$41.15 billion (US$1.34 billion), with outstanding mortgages with preferential interest rates for first-time home buyers reaching NT$7.2 billion, up NT$400 million from the previous month and accounting for 17.5 percent of their total housing loans, central bank data showed.
Housing transactions in the six special municipalities increased by 4.9 percent from 18,745 units in June to 19,668 units last month, and rose 15.3 percent year-on-year from 17,062 units, local government data released earlier this month showed.
In the first seven months of the year, the five state banks’ mortgage loans totaled NT$282.38 billion, up 8.84 percent from NT$244.42 billion a year earlier. Housing deals in the six municipalities during the same period increased 6.4 percent year-on-year from 115,695 units to 123,043 units, central bank and local government statistics showed.
Separately, the five banks last month saw their average lending rates increase to 1.457 percent, up 0.156 percentage points from 1.301 percent a month earlier, which the central bank attributed to higher costs on loans intended for working capital and capital expenditure.
Excluding government loans, interest rates averaged 1.489 percent, up 0.176 percentage points from 1.313 percent in June, the central bank said in an e-mailed statement.
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