February mortgage rate surges to four-year high

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CNA

TAIPEI–The average rate on new mortgages extended by five major lenders in Taiwan in February hit a fresh four-year high, while the amount of new housing loans extended by the five banks fell from a month earlier, according to the central bank.

In a statement released Friday, the central bank said the average rate on new housing loans offered by the five major banks rose 0.022 percentage points from January to 1.969 percent in February.

The central bank said the mortgage rate has been on the rise as the five lenders have been aware of the needs for risk control by boosting home buyers’ borrowing costs. The five lenders were Bank of Taiwan, Land Bank of Taiwan, Taiwan Cooperative Bank, Hua Nan Commercial Bank and First Commercial Bank.

The central bank said new housing loans extended by the five lenders in February fell by NT$19.61 billion (US$656 million) from a month earlier to NT$25.71 billion.

The central bank said the fall in the February mortgage amount reflected the decline in housing transactions due to the reduced number of working days in the month in which the nine-day Lunar New Year holiday fell.

In Taipei City, for example, transactions of residential and commercial property in February fell to 2,099 units from January’s 3,769, while transactions in New Taipei City declined to 3,662 units in February from 6,448 units recorded a month earlier.

However, the mortgage amount in the first two months of this year rose to NT$71.03 billion from NT$66.33 billion recorded over the same period of last year, the central bank said.

In the first two months of this year, housing transactions in Taipei rose 23.41 percent from a year earlier, while transactions of residential and commercial property in New Taipei City gained 48.83 percent year-on-year.

Also as a reflection of the fewer working days in February, housing loans under a government aid program for new young couples fell by NT$4.1 billion from January to NT$5.5 billion, the central bank said.

The bank cited statistics compiled by Cathay Real Estate Development Co. and Sinyi Realty Inc. as saying local property prices rose in the fourth quarter of last year, indicating that the local property market remained stable.

The average interest rate of all kinds of new loans extended by the five banks in February stood at 1.672 percent, up from 1.611 percent recorded a month earlier, the central bank said.

Excluding lending to the Treasury, the average interest rate of new loans extended by the five lenders in February fell to 1.717 percent from January’s 1.723 percent, the central bank added.