The basic interest rate on housing loans extended by Government Housing Loan Corp. will be raised to 2.7 percent from the current 2.3 percent, effective Sept. 18, the Land, Infrastructure and Transport Ministry said Thursday.
It will be the second rate increase in a little more than two weeks. On Sept. 2, the rate was raised to 2.3 percent from the record low of 2 percent.
The latest increase follows a rise Wednesday in the interest rate on loans under the government’s “zaito” fiscal investment and loan program to 1.8 percent from 1.2 percent in response to surging long-term interest rates.
The basic interest rate is applied to the first 10 years of repayments on the public loans for construction of houses with a floor space of up to 175 sq. meters.
The number of applications for the housing loan firm’s loans jumped to 23,086 between July 2 and Sept. 1 as more individuals tried to beat the expected rise in mortgage rates.
During the previous period between April 21 and June 9, the number of applications was 11,744.