The average mortgage interest rate among major state-run lenders reached a two-year high of 1.378 percent last month, and could rise further this month on the back of a monetary policy change, the central bank said yesterday.
It is the fourth consecutive month of upticks as 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) followed the central bank’s rate hike of 0.25 percentage points on March 17.
The upward adjustments could be more evident this month when banks put new rates into effect, the central bank said.
Higher borrowing costs have not slowed mortgage lending, which gained NT$32.55 billion (US$1.11 billion) to NT$73.49 billion, it said.
The spring sales season helped boost transactions, and a rise in property prices also supported lending volumes, it said.
The five state-run lenders play a key role in setting lending trends as they account for 40 percent of the market, it added.
Soaring building material prices render housing price corrections unlikely, even though policymakers have launched measures to induce a soft landing, it said.
The central bank has introduced credit controls to raise costs on land hoarding and multiple-home mortgages, especially in the Taipei and New Taipei City. The Ministry of the Interior has extended capital gains taxes to transfers of presale housing contracts.
Mortgage rates last month averaged 1.293 percent, up 0.126 percentage points from February, the central bank said, adding that the shift came after the five banks boosted lending.
Loans to government agencies and large corporations bear lower interest rates because of their sound credit profiles. Lending to small and medium enterprises involve a higher interest spread because they have fewer financing channels.
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