Fixed-rate mortgages accounted for 31.9% of newly extended home loans in South Korea in July, down 5.8 percentage points from June and the lowest share since February 2014, when it was 31.8%. The Bank of Korea’s July weighted-average interest-rate report, released on the 26th, showed the shift reflects lower current variable rates: fixed mortgage rates rose 0.23 percentage point to 4.76% a year, while variable rates increased 0.08 percentage point to 4.35%. Across all household loans, the fixed-rate share fell 1.7 percentage points to 21.0%, its lowest in four years and two months. The fixed-rate share of outstanding household loans remained much higher at 62.4%, indicating that the move toward variable rates is concentrated in new borrowing. Higher benchmark rates, including a rise in the five-year bank bond yield to 4.39%, pushed up fixed-rate lending, while the Cost of Funds Index (COFIX) for newly handled loans rose 0.13 percentage point to 3.18%. New household loan rates at deposit-taking banks increased to 4.64%, mortgage rates reached 4.48%, and unsecured personal-loan rates rose to 5.97%, their highest since December 2024. The Bank of Korea warned that a larger variable-rate share could leave households more exposed if market rates rise. Corporate loan rates moved lower, falling to 4.20%, as small and medium-sized enterprise loan rates declined to 4.22% amid preferential-rate support and greater availability of low-rate lending.