Hana Bank, Partial Suspension of Mortgage Loan Sales Starting Today

Hana Bank Temporarily Suspends Some Mortgage Loans from the 16th Until Year-End
Major Commercial Banks Already Tightening Loans with DSR Adjustments and Reduced Preferential Interest Rates

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[Asia Economy Reporter Kim Min-young] Hana Bank will suspend sales of certain mortgage loan products starting today (the 16th).

According to the financial sector, Hana Bank will temporarily halt new issuance of loans under 'Mortgage Credit Insurance (MCI)' and 'Mortgage Credit Guarantee (MCG)' from today. This measure is due to the imminent exhaustion of internally set limits.

The affected products include Gagahoho Collateral Loans (MCI), Variable Rate Mortgage Loans (MCG), One-Click Mortgage Loans (MCI), Hybrid Rate Mortgage Loans (MCI, MCG), Apartment Loans (MCI, MCG), and Fixed Monthly Repayment Mortgage Loans (MCI, MCG). Using MCI or MCG loans allows homeowners to borrow additional amounts equivalent to small tenant deposit guarantees. Suspension of these loans effectively reduces the borrowing limit available.

Major commercial banks have already been accelerating total loan volume management ahead of the year-end. NH Nonghyup Bank temporarily tightened the Debt Service Ratio (DSR) standards applied to housing-related loans starting from the 9th. DSR is an indicator that calculates the borrower's repayment burden by dividing the annual principal and interest repayment amount of all household loans by annual income. Additionally, preferential interest rates on major loan products will be reduced until the end of the year.

Woori Bank has also suspended MCI and MCG loans until the end of the year. A Woori Bank official explained, "This is a conditional restriction on jeonse (key money deposit) loans until year-end to strengthen risk management of jeonse fund loans," adding, "The intention is to provide jeonse loans only to genuine borrowers."

Shinhan Bank and KB Kookmin Bank had already adjusted DSR standards for some loans in September and October, respectively. Shinhan Bank aligned the DSR application for new and existing customers to 100% when setting personal credit loan limits, whereas previously it was 100% for new customers and 120% for existing customers.

KB Kookmin Bank adjusted the DSR standard for KB Mugunghwa Credit Loans (in cooperation with the National Police Agency) and group credit loans from the previous 70% to within 40% as of the 16th of last month.

As banks tighten lending, it is expected that loans for genuine borrowers needing funds until year-end will become more difficult to obtain.

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