South Korean banks' mortgage rates hit the highest level in about 7 1/2 years in December amid rising borrowing costs, central bank data showed Friday.

Banks' mortgage loan rate averaged 3.63 percent a year in December, 0.12 percentage point higher from a month earlier and the highest since May 2014, according to the data by the Bank of Korea (BOK).

Mortgage rates have been on the rise as the BOK has raised the policy rate in recent months as part of efforts to tighten its long accommodative policy put in place to cushion 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 increases in August and November last year.

The central bank hinted at further rate hikes in the coming months.

Banks' unsecured loan rate, however, inched down 0.04 percentage point to 5.12 percent last month following a 0.54 percentage-point jump in the previous month.

The average interest rate on household loans rose to 3.66 percent in December from the previous month's 3.61 percent. It was still the highest since August 2018.

With the lending rate hikes, banks' rates for deposits also rose to 1.7 percent in December from the previous month's 1.57 percent. The deposit rate marked the highest since June 2019, when the rate stood at 1.79 percent. (Yonhap)