The average mortgage rate charged by the five major state-run banks in the nation last month rose to a nearly 16.5-year high, reflecting the effects of the central bank’s selective credit controls and lenders becoming conservative in extending new mortgages.
The average mortgage rate of the five banks — 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) — increased to 2.303 percent, up 0.02 percentage points from the previous month, data released by the central bank showed yesterday.
It was the highest since January 2009, when the figure reached 2.523 percent, the data showed.
Photo: Hsu Yi-ping, Taipei Time
The five banks’ data are used to gauge the overall health of the nation’s property market, as their combined mortgages account for about 40 percent of the total mortgages extended by local lenders.
Mortgage rates are primarily tied to short-term rates, which have been kept unchanged by the central bank since June 2023.
But the average mortgage rate has risen for the 13th consecutive month, which the central bank attributed partly to its several rounds of selective credit control measures affecting lenders’ housing loan strategies.
Moreover, some lenders might have also become conservative in extending new mortgages as their real-estate lending approaches the financial regulator’s property loan quota under Article 72-2 of the Banking Act (銀行法), the central bank added.
Total new mortgages extended by the five banks last month reached NT$70.92 billion (US$2.32 billion), a monthly increase of NT$4.55 billion but an annual decrease of NT$80.82 billion, central bank data showed.
The central bank said the annual decline aligned with the decrease of housing deals in the nation’s six special municipalities last month, which fell 29 percent year-on-year to 18,856 units.
In the first seven months of the year, the five banks’ new mortgages totaled NT$479.80 billion, down 28.71 percent from NT$672.99 billion in the same period of last year, the central bank’s data showed.
That also matched a 27 percent annual decline in total housing deals in the six municipalities to 119,058 units over the same period, the lowest in eight years, local governments’ tallies showed.
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