TAIPEI (Taiwan News) — Taiwan’s average mortgage interest rate rose to 2.44% in the third quarter, the highest level since 2009, as a series of rate hikes and policy adjustments increase the cost of homeownership, CTEE reported Monday.
Data from the Joint Credit Information Center shows that new mortgage applications in the third quarter totaled 37,747, an 8% decrease from the same period last year. The decline reflects cooling demand in Taiwan’s housing market.
Meanwhile, the average home price reached a record NT$14.53 million (US$466,116). The average mortgage granted was NT$10.32 million, the second-highest on record.
Loan-to-value ratios, which measure the size of a loan relative to the property’s value, fell to their lowest level in more than five years. This suggests that banks are taking a more cautious approach to lending following recent regulatory changes.
Tseng Ching-te (曾敬德), project manager at Sinyi Realty’s research center, noted that Central Bank officials had previously warned that interest rates would not remain low indefinitely. New homebuyers now face starting rates of around 2.5%, compared with 2.2% for earlier borrowers.
Tseng noted that although higher interest rates raise the cost of holding a home, buyers remain primarily focused on loan-to-value ratios. He added that current policies still support first-time homebuyers, while those looking to upgrade their homes may encounter closer scrutiny under new rules.
He advised homeowners with mortgages near 2.2% to consider repaying part of their principal using windfalls or bonuses. Such repayments could reduce interest costs and may be more advantageous than in previous years, when rates were still around 1%.
