They're Cutting Rates, So Why Is My Loan Still the Same?
The news is full of talk about rate cuts, but my loan interest rate hasn't budged. It's a variable rate, so I looked into why it isn't going down.
Turns out the benchmark rate and loan rates aren't directly linked; they're more affected by banks' funding costs and added spreads. On top of that, some say rate-cut expectations are already priced in.
In the end, I figured refinancing might be the answer, so I checked the early repayment fee first. It's waived after three years, so I'm going to wait a bit longer.
If anyone has refinanced recently, I'd love to know how much you actually saved.
5 answers
These days the news says interest rates are dropping, but my bank account isn't dropping lol
I refinanced last year, and based on a 300 million won loan, the rate difference was about 1.2 percentage points a year, which saved me nearly 300,000 won a month. On the other hand, the stamp duty plus the costs of setting up and canceling the mortgage came to a little over 1 million won, and just preparing the paperwork took 2 weeks. If you wait 3 years, you save on the fees, but the interest difference over those 3 years could be bigger, so run the numbers.