South Korean banks' mortgage rates hit the highest level in about 10 years in January amid rising borrowing costs, central bank data showed Thursday.

Banks' mortgage loan rate averaged 3.85 percent per year in January, 0.22 percentage point higher from a month earlier, according to the data from the Bank of Korea (BOK).

It also marked the eighth consecutive month of on-month increase and the highest since April 2013.

Mortgage rates have been on the rise as the BOK has hiked its policy rate in recent months in a bid to tighten its long accommodative policy aimed at cushioning the fallout from the pandemic.

On Jan. 14, the BOK raised the benchmark interest rate by a quarter percentage point to 1.25 percent, the third pandemic-era hike following the hikes in August and November last year.

The central bank has hinted that further rate hikes may be on the horizon in the coming months.

Banks' unsecured loan rate also rose 0.16 percentage point to 5.28 percent in January, the highest level since September 2014.

The average interest rate on household loans thus went up to 3.91 percent in January from the previous month's 3.66 percent, representing the highest since July 2014.

The data also showed banks' average rates for deposits declining 0.05 percentage point on-month to 1.65 percent in January, with the loan-deposit spread widening to 1.80 percentage points from 1.55 percentage points in December. (Yonhap)