The nation’s five major state-run banks extended NT$101.221 billion (US$3.082 billion) of new mortgages last month, the second-highest amount on record, central bank data released on Tuesday showed.
Total new mortgages extended by Bank of Taiwan (臺灣銀行), 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) last month decreased by NT$15.014 billion, or 12.92 percent, from a record NT$116.235 billion the previous month, central bank data showed.
The monthly decline in new mortgages was due to fewer working days and decreasing housing deals last month, the central bank said.
Photo: Hsu Yi-ping, Taipei Times
In addition, the five banks’ preferential loans for first-home buyers and whole-batch mortgage cases — as well as lending to civil servants, military personnel and public school teachers — also fell last month, which led to lower contribution to new mortgages in the month, it said.
Nonetheless, the five banks’ new mortgages last month were NT$43.454 billion, or 75.22 percent, higher than the same month a year earlier, the data showed.
Last month, the average mortgage rate charged by the five banks fell 0.003 basis points to 2.184 percent from 2.187 percent — the highest in 15 years — the previous month, mainly due to the higher proportion of quality borrowers as banks usually give more favorable rates to those with good credit, the central bank said.
The data also showed that preferential loans for first-home buyers contributed 40.92 percent of the total new mortgages last month, up 0.32 basis points from the previous month and the highest since August last year — when the government introduced a new mortgage initiative for first-home buyers.
The program has more flexible conditions for loan applications, offers favorable lending terms and sets a lower barrier for young people than the previous similar scheme.
However, it has also drawn criticism for rekindling a hot housing market in Taiwan over the past few months, prompting the central bank to introduce a new round of credit control measures early this month and forcing the Ministry of Finance to crack down on abuses of the favorable loans.
During the first half of this year, the five state-run banks extended NT$551.251 billion of new mortgages, a record high for the period and up 110.53 percent from a year earlier, the data showed.
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