Commercial Banks Tighten Housing Loans...Mortgage Lending Suspended One After Another

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] Major commercial banks have tightened regulations on mortgage loans. Following Woori Bank and Shinhan Bank, Hana Bank has also decided to suspend mortgage credit insurance (MCI) and mortgage credit guarantee (MCG) loans.

According to the financial sector on the 5th, Hana Bank will temporarily suspend MCI and MCG loans starting from the 16th for the purpose of managing household loans. This is because the bank has nearly exhausted its predetermined loan limits.

The products that will no longer be sold include Gagahoho Collateral Loan (MCI), One-Click Mortgage Loan (MCI), Variable Rate Mortgage Loan (MCG), Hybrid Rate Mortgage Loan (MCI/MCG), Apartment Loan (MCI/MCG), and Fixed Monthly Repayment Mortgage Loan (MCI/MCG). On Hana Bank’s website, the loan application buttons for these products are already disabled.

Earlier, starting from the 30th of last month, Woori Bank suspended MCI and MCG loans. Shinhan Bank also stopped MCI and MCG-linked loans but has recently resumed sales.

When MCI and MCG loans are suspended, the loan limits available to borrowers decrease.

Banks deduct the priority repayment guarantee amount under the Housing Lease Protection Act from the loan amount in advance before issuing loans. To borrow up to 40% of the house price, borrowers must subscribe to MCI or MCG provided by SGI Seoul Guarantee Insurance or Korea Housing Finance Corporation.

Hana Bank will also suspend fixed-rate qualified loans starting from the 30th. Only loans applied for and approved before the 27th will be executed. Qualified loans are fixed-rate mortgage loans that allow borrowing up to 500 million KRW when purchasing a house priced at 900 million KRW or less. Since there are no income or other eligibility requirements, this product is popular among high-income urban workers.

This content was produced with the assistance of AI translation services.