[비즈한국] As the time for resetting mortgage loans, which were initiated during the COVID-19 pandemic at low interest rates of around 2%, has arrived in earnest, there are signs that household financial burdens will increase rapidly. At the time, financing conditions were so favorable that people spoke of 'all-time low interest rates,' but over the span of five years, the interest rate environment has changed completely. Now, that gap is becoming a reality in the form of interest burdens.
According to the financial sector, it is estimated that the balance of mixed-type mortgages taken out in 2021 by the four major banks—KB Kookmin, Shinhan, Hana, and Woori—that are facing interest rate resets this year exceeds 12 trillion won. Mixed-type mortgages are structured to apply a fixed interest rate for the first five years and then reset the rate based on market rates. The problem is that the 5-year bank bond yield, which serves as the benchmark for this product, has soared from the mid-1% range at that time to the mid-to-high 3% range recently. This means the base rate alone has more than doubled, and once the spread is added, the actual loan interest rate is highly likely to be more than 2 percentage points higher than in the past.
For example, a borrower who borrowed 500 million won at 2.5% per annum paid 12.5 million won in annual interest, but if the rate is reset to 5.5%, the annual interest increases to 27.5 million won. This is an additional expenditure of 15 million won per year, or over 1.2 million won per month. For dual-income households, this is a situation where one person's entire monthly salary evaporates into interest payments. This is not just a matter of 'interest rates rising a bit,' but a shock that shakes the overall household consumption capacity and asset management plans.
What is more concerning is the environment where it is difficult to expect interest rates to fall again in the near future. The Bank of Korea recently sent a message in its monetary policy direction that signaled little possibility of a base rate cut. Furthermore, as the possibility of large-scale public bond issuance for creating policy funds such as the National Growth Fund is being discussed, downward pressure on bond market yields appears limited. Geopolitical tensions surrounding the U.S. and Europe, as well as global bond market volatility, are also factors that make it difficult to expect a rapid decline in domestic interest rates. This interest rate reset is not a temporary ripple; it signifies a new starting point where we must adapt to a higher interest rate level.
The increase in household interest burdens is highly likely to lead to a contraction in consumption. As financial costs, which are essentially housing expenses, rise, optional expenditures such as dining out, travel, and consumer durable goods are bound to decrease. This acts as a burden on the domestic economy. Some borrowers may choose to sell their properties to reduce their loans. If the supply of quick-sale properties increases, the recovery speed of the real estate market could be limited. In effect, the burden of interest rates acts as a force that tightens liquidity across the entire asset market.
Conversely, banks' profitability conditions are improving. This is because while loan interest rates are rising, deposit rates are falling again, causing the gap between lending and deposit rates to widen. The gap between household lending and deposit rates has expanded significantly compared to a few years ago. It is a structure that is a burden on households but a factor for improved profitability for financial companies.
In this environment, what is important for investors is not expectations about market direction, but checking their own cash flow. You must verify the exact reset timing and expected interest rate through your bank app or customer service center. Knowing the concrete numbers is more important than vague anxiety.
You should also compare loan refinancing conditions at other banks. If your credit score has improved or your income has increased, there is room to switch to a lower interest rate. Recently, banks have been lowering refinancing interest rates to attract high-quality customers.
Now is the time to reconsider aggressive investments that utilize leverage. Instead, an approach that increases the proportion of assets with stable cash flow is effective. If deposit interest rates are not attractive, you could also consider using short-term bond products or interest-linked deposits.
Predicting when interest rates will fall again is difficult even for experts. The important thing is to build a financial structure that will not be shaken even at current interest rate levels. This mortgage reset is not just financial news, but a signal of structural change connected to household consumption, investment, and the flows of real estate and financial markets. Open your account right now, check your loan conditions, and crunch the numbers. That is the first step to surviving 2026.