TAIPEI (Taiwan News) — In the first quarter of the year, Taiwan’s mortgage default rate rose to 0.08%, the highest quarterly level in nearly three years, CTEE reported on Wednesday.

A mortgage default occurs when a borrower fails to meet the terms of their loan, such as missing payments or prepaying the loan too quickly. The current rate remains far below the 1.39% peak seen during Q1 2009 after the financial crisis, but has edged up slightly from 0.07% after late 2021.

Among Taiwan’s six major cities, Taipei recorded the highest default rate at 0.13%, followed by Tainan and Kaohsiung at 0.08%.

Tseng Ching-te (曾敬德), project manager at Sinyi Realty, said that rising interest rates and tighter credit policies have pushed up monthly mortgage payments. While most homeowners can manage the higher costs, new buyers face greater challenges under stricter lending rules.

Tseng added that Taiwan’s relatively stable economy and labor market make sudden income loss among households unlikely, so higher mortgage burdens rarely translate into defaults. He also pointed out the housing market’s liquidity, saying homeowners under financial pressure can usually sell properties if needed.

However, Tseng cautioned that factors such as US tariffs and a previously stronger Taiwan dollar have led some business owners to sell real estate. The broader effects on companies and the market remain to be seen.

Data from Taiwan’s Joint Credit Information Center shows the average mortgage nationwide over the past five years is NT$6.26 million (US$201,274), with annual increases exceeding NT$300,000.