This is an English version of our Korean article, based on public information as of October 4, 2026. Please check the official sources below for the latest details.
Read the original Korean article
Summary
- According to US Treasury data, the US 10-year Treasury yield was 5.28% per year on October 2. It has risen sharply from 4.19% in early January and 3.97% at the end of February, and 5.29% on September 30 is the highest closing level this year.
- As US long-term yields rose, Korea’s 5-year bank bond yield also hit this year’s high of 4.655% per year on September 15, adding upward pressure on loan rates.
- At the five major banks, variable-rate mortgages were 4.25–6.46% per year and 5-year fixed-rate mortgages 4.89–7.29% as of September 15, and deposit rates also rose, led by the large banks.
- Brokerages see conditions for rates to trend lower as still insufficient, but forecasts could change with oil prices and US inflation data.
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How Far Has the US 10-Year Yield Risen?
The daily Treasury yield data published by the US Treasury shows the 10-year yield starting this year at 4.19% on January 2, falling to 3.97% on February 27, and then rising again. The yield, which was 4.44% at the end of June, jumped by more than 0.5%p in two months to 4.75% at the end of August and 5.29% at the end of September.
What stands out is the speed since mid-September. After hitting 5.00% on September 15, it climbed to 5.29% in about two weeks, and on October 2 it stayed at a similar level of 5.28%. The Korea Economic Daily (한국경제) reported that it recently topped 5.3%, a 24-year high since May 2002.
| Date | 10-year yield |
|---|---|
| January 2, 2026 | 4.19% |
| February 27, 2026 | 3.97% |
| June 30, 2026 | 4.44% |
| August 31, 2026 | 4.75% |
| September 15, 2026 | 5.00% |
| September 30, 2026 | 5.29% |
| October 2, 2026 | 5.28% |
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Why Did Yields Rise?
The market points to several reasons. According to the Korea Economic Daily, a Kiwoom Securities (키움증권) researcher analyzed that concerns about further Fed tightening alone cannot explain it, and that solid US economic data, vigilance about inflation, and a rising term premium on long-dated bonds due to fiscal soundness concerns all played a part.
International oil prices also contributed. Financial News (파이낸셜뉴스) reported that international oil prices topped $100 a barrel again amid worsening conditions in the Middle East, raising inflation anxiety. The Fed raised its policy rate to 3.75–4.00% on September 16, and the Bank of Korea also noted in its August monetary policy decision statement that long-term government bond yields had risen on concerns about fiscal soundness in major countries.
This is only the market’s interpretation of the causes. A long-term yield is a price that reflects expected inflation, the policy rate outlook and Treasury supply and demand all at once, so it is hard to pin it on a single reason.
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How Does It Pass Through to Korean Rates?
US Treasury yields serve as a benchmark for the global bond market. If investors can earn a high return on US Treasuries, they demand higher returns on other countries’ bonds too. That puts upward pressure on Korean government bond and bank bond yields, and loan rates based on those yields are affected as well.
According to Financial News, the 5-year bank bond (AAA) yield, which is the benchmark for mortgage rates, was 4.655% per year on September 15, this year’s high. That is 1.156%p higher than 3.499% at the end of last year, and it rose 0.273%p in the first half of this month alone, about 7 times the increase over all of August. Money Today (머니투데이) reported that the 5-year financial bond yield was 4.578% on September 11, the highest since March 2023.
| Date | 5-year bank bond yield |
|---|---|
| End of 2025 | 3.499% |
| End of March 2026 | 4.051% |
| End of June 2026 | 4.241% |
| End of July 2026 | 4.343% |
| End of August 2026 | 4.382% |
| September 15, 2026 | 4.655% |
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How It Affects Your Daily Life
The benchmark differs by type of loan. A 6-month variable-rate mortgage is linked to a bank funding cost indicator such as COFIX (based on new loan amounts), while 5-year fixed or mixed-rate loans refer to market rates such as the 5-year financial bond yield. So rising US long-term yields often affect fixed-rate and new loans first.
According to Money Today, as of September 15 the variable-rate mortgage rates at the five major banks were 4.25–6.46% per year, with the lower end up 0.23%p from two months earlier (4.02–6.37%). The 5-year fixed rate was 4.89–7.29%, with the lower end up 0.15%p. The 6-month variable-rate personal loan was 4.27–6.12% per year and the jeonse loan was 3.65–6.35% per year.
| Loan type (five major banks) | Two months earlier | As of September 15 |
|---|---|---|
| Variable-rate mortgage | 4.02–6.37% | 4.25–6.46% |
| 5-year fixed-rate mortgage | 4.74–7.41% | 4.89–7.29% |
| 6-month variable-rate personal loan | 4.19–5.77% | 4.27–6.12% |
| 6-month variable-rate jeonse loan | 3.33–6.03% | 3.65–6.35% |
COFIX caught its breath for a moment. The August COFIX on a new-loan basis, announced by the Korea Federation of Banks on September 15, was 3.18%, unchanged from the previous month. But Money Today reported that banks raised time deposit rates in September, so the September COFIX is likely to rise again. The September COFIX is expected to be announced in mid-October.
You can get a feel for the interest burden with a simple calculation. With a loan balance of KRW 300 million, a 0.5%p rise in the rate increases annual interest by about KRW 1.5 million. Conversely, for a deposit of KRW 10 million, a rate that is 0.5%p higher adds about KRW 50,000 to annual pre-tax interest. This is only a simple calculation, and actual amounts vary with the product and taxes.
On the deposit side, there was news that large banks raised time deposit rates by roughly 0.1–0.6%p in September. However, the size differs by bank and product, so it is a good idea to compare rates before signing up, using the Financial Supervisory Service’s Finlife (금융상품한눈에) or the Korea Federation of Banks Consumer Portal.
There are three things to check now: whether your loan is variable-rate or fixed-rate, when your next rate reset date is, and whether your monthly repayment would still be manageable if rates rise further. If you are thinking about refinancing, you need to weigh early repayment fees along with the new loan’s limit and regulations, so it is safest to talk with your bank.
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Factors to Watch Ahead
The outlook is cautious. A Kiwoom Securities researcher saw the conditions for yields to fall on a sustained trend as still insufficient. On the other hand, an NH Investment & Securities (NH투자증권) researcher explained that the trend could change if ceasefire talks between the US and Iran progress and oil prices plunge, or if weak US economic data lowers the chance of an October rate hike.
In fact, Reuters reported that weaker-than-expected US jobs data for September lowered the chance of a further Fed hike in October to about 25%. Still, inflation is high, so talk of a December hike persists. This is closer to saying that it is hard to expect short-term rates to fall right away.
Also check the upcoming schedule. The Bank of Korea’s Monetary Policy Board meets on October 22 and the US FOMC on October 27–28. Depending on the results of the two meetings and the inflation data released in between, long-term yields could move again. The most realistic approach is to check your repayment capacity in advance to prepare for possible changes.
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Frequently Asked Questions
Q. Why do my loan rates rise when US Treasury yields rise?
US Treasury yields are the benchmark for the global bond market, so they also affect Korean government bond and bank bond yields. Banks raise funds through bank bonds and similar instruments, so when funding costs rise, it is reflected in loan rate calculations. However, how much actually passes through varies with each bank’s spread and preferential rates.
Q. Should I switch from a variable rate to a fixed rate now?
The answer depends on your situation, so it is hard to give a one-size-fits-all answer. You need to weigh early repayment fees, the new loan’s limit and regulations, the remaining loan term and your monthly repayment capacity. Compare rates on the Financial Supervisory Service’s Finlife and confirm by talking with your bank.
Q. Will deposit rates keep rising too?
There is no way to know. Large banks raised deposit rates in September, but what happens next depends on market rates and the Bank of Korea’s base rate decisions. Before signing up, also check the maturity, preferential conditions and early termination terms.
Q. Where can I check the US 10-year yield?
You can check it in the daily par yield curve data on the US Treasury website. Intraday figures cited by the media and closing figures can differ slightly.
Sources
- US Treasury: Daily Treasury Par Yield Curve Rates
- Federal Reserve: September 2026 FOMC Statement
- Bank of Korea: August 2026 Monetary Policy Decision Press Release (PDF)
- Financial News (파이낸셜뉴스): Article on US Treasury yields passing 5% and bank bond yields (Sept 16, 2026)
- Money Today (머니투데이): Article on COFIX and mortgage rates (Sept 15, 2026)
- Korea Economic Daily (한국경제): Weekly outlook (Oct 4, 2026)
- Global Economic (글로벌이코노믹): US job slowdown and the Fed’s October outlook (Oct 4, 2026)
- Financial Supervisory Service: Finlife (금융상품한눈에)
- Korea Federation of Banks: Consumer Portal
This article is for informational purposes only and is not a recommendation to buy or sell any financial product or to invest. Please make investment and financial decisions at your own judgment and responsibility. Eligibility for many Korean programs depends on residency or registration status in Korea, so please confirm on the official site.
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