Financial Services Commission: "High-income earners without mortgage loans unaffected by DSR application on credit loans"

[Asia Economy Reporter Kim Hyo-jin] The Financial Services Commission announced that regarding the application of the Debt Service Ratio (DSR) regulation to high-income earners with an annual income exceeding 80 million won whose credit loans exceed 100 million won, "If they have not separately taken out a mortgage loan (Judaemdae), the application of DSR does not significantly affect the available amount for credit loans."

The Financial Services Commission also added that for those without a home, it is possible to obtain a mortgage loan when purchasing a house priced at 900 million won or less, and typically loans up to 40-50% of the Loan-to-Value (LTV) ratio are available. In such cases, if credit loans are utilized below 100 million won, this measure will not have an impact.

The Financial Services Commission further stated, "This measure prioritizes the application of borrower-level DSR to high-value credit loans of high-income earners to firmly establish a DSR-centered loan screening practice," adding, "In this process, it is expected to also prevent some high-income groups from evading mortgage loan regulations or engaging in gap investments by excessively using credit loans."

During the response to the COVID-19 crisis, the Financial Services Commission plans to maintain an active credit supply policy for low-income earners and small business owners while strengthening banks' self-management efforts to curb the short-term surge in credit loans.

The Financial Services Commission stated, "While continuously encouraging credit supply to low-income groups and genuine demanders, we will actively consider expanding policy finance supply if necessary," and emphasized, "We will carefully ensure that genuine demanders do not face difficulties in securing funds needed for home purchases."

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