The Bank of Korea signaled that its July rate increase marked the start of a tightening cycle, with Deputy Governor Ryoo Sang-dai saying another hike is likely unless a special shock emerges. Analysts cited persistent inflation, home prices and higher U.S. Treasury yields as forces keeping pressure on policy, with some expecting the base rate to reach 3.5% early next year and Citi's Kim Jin-wook outlining two 0.25 percentage-point increases in August and November followed by another move next year. Higher policy rates are being reinforced by market forces and regulation. Rising global bond yields have already lifted South Korean household loan rates even while the BOK had kept its base rate steady, and new Financial Services Commission measures will raise capital requirements on riskier mortgages and curb lending capacity from next year. Market participants say that combination is likely to push mortgage rates higher, especially as a coming ban on certain jeonse loans (lump-sum deposit rental loans) may shift more demand into home lending. The burden is amplified by the growing use of variable-rate mortgages, which accounted for 62.3% of new mortgage lending in June. The BOK estimates that every 0.25 percentage-point increase in mortgage rates adds 1.8 trillion won, or $1.3 billion, to borrowers' annual interest burden.