Bogeumjari Lending Increases for Second Straight Month

 As a result of rising market interest rates, bogeumjari loans (long-term, fixed-rate mortgage loans) increased for the second straight month. According to KHFC, it extended KRW273.3 billion in bogeumjari loans in June 2007. This represented growth of 9% compared to KRW250.1 billion in May.

  The extension of bogeumjari loans had begun to fall after peaking at KRW 278.2 billion in February. However, the figure rose for the second month in a row in June, following on from the extension of KRW250.1 billion in May. Daily average extension is also clearly on the rise, running at KRW 11.9 billion in May but KRW13.8 billion in June.

  This steady upward movement in the extension of bogeumjari loans may be attributable to the rising interest rates on the variable-rate mortgage loans linked to CDs that are offered by other financial institutions and growing customer awareness of the advantages of long-term, fixed-rated products due to interest rate volatility.