Taiwan Central Bank Raises Interest Rates Again 央行再升息半碼 新房貸利率將創6年新高

Taiwan's mortgage interest rate is expected to reach a 6-year high after the Central Bank raised interest rates for the second time by 0.125 percent. The new monthly payment will increase by around NT$1,000 for every NT$10 million mortgage.

The Taiwan Central Bank raised interest rates by another 0.125 percent on the 16th, as rate hikes have totaled 0.375 percent for two consecutive quarters. The new mortgage interest rate will stand at 1.7 percent, a 6-year high. Families with mortgages are suffering as a result.

Traditional Market Stall Owner: “My son's monthly salary is NT$52,000. He has to pay a monthly mortgage of more than NT$30,000. Do we think that children will be happy? Tell the Central Bank to stop raising interest rates.”

Let's try to calculate the interest on a NT$10 million mortgage. Before the latest interest rate increase, the mortgage rate was 1.5 percent and the monthly principal and interest is NT$34,512. After the Central Bank raised interest rates by 0.25 percent on March 17, the mortgage rate was thought to reach 1.75 percent. However, in May, the rate was only raised to 1.6 percent. Thus, the principal plus interest is only NT$34,994 per month, an increase of NT$482. The second interest rate hike was 0.125 percent. Add this latest hike to the previous mortgage rate and the newest rate is 1.725 percent. The monthly mortgage payment will reach NT$35,602, an increase of NT$608. Mortgage payments for families have increased by more than NT$1,000 per month since March.

Ho Shih-chang, Research Director, My Housing Magazine: “Based on a NT$10 million mortgage, the new monthly payment increases by less than NT$2,000. No one knows how much the interest rate will rise in the second half of this year to next year. So this is a relatively large uncertainty for everyone.”

The Executive Yuan has announced relevant support measures to reduce the burden of certain groups, as rising interest rates will reduce household spending. These include bailout and revitalization loans, youth entrepreneurship, and student loans, all of which will not be affected by interest rate hikes.

Pan Wen-chung, Minister of Education: “The government will subsidize it all. This necessary rise in interest rates shouldn't create a burden on young people's student loan interest.”

Experts believe this rate hike will not affect the economy for the time being. Taiwan's economy is export-oriented so poor exports combined with rising interest rates may affect Taiwan's domestic demand, resulting in an economic slowdown next year.











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