Taiwan Central Bank Holds Rate at 2%, Eases Second-Home Mortgage Cap

Taiwan’s central bank has kept its discount rate at 2% since raising it by 12.5 basis points in March 2024, shifting the focus of monetary policy toward curbing inflation and housing-market risks. Any rate adjustment would affect borrowing costs for businesses and mortgage holders, while the seventh round of selective credit controls also shapes banks’ property lending and homebuyer financing.

At its second-quarter joint meeting of the board of directors and supervisors on June 18, 2026, the central bank kept the discount rate at 2%, marking a ninth consecutive quarter without a change and matching market expectations. It also left the seventh round of credit controls unchanged and will continue monitoring whether housing transactions, prices and banks’ real-estate lending are cooling.

Taiwan's central bank has introduced successive rounds of selective credit controls since 2020. Its seventh round of measures in September 2024 lowered the nationwide loan-to-value cap on second-home mortgages for individual borrowers to 50% from 60% and barred grace periods. By the end of February 2026, the concentration of real-estate lending had fallen to 36% from a peak of 37.6%, while annual growth in home-purchase loans had slowed to 4.5% from 11.3%, indicating an improvement in speculation and excessive concentration of funds.

At its board meeting on March 19, 2026, the central bank approved a modest adjustment to the controls, restoring the second-home mortgage cap to 60% from March 20 while leaving all other restrictions unchanged. For a NT$20 million home, the maximum loan rises to NT$12 million from NT$10 million. Borrowers who applied by March 19 or whose loans were recently disbursed may also seek an additional 10% in financing if they pledge not to direct the extra funds toward restricted real estate and receive approval from their lender.