January Housing Loan Increase of 4.1 Trillion Won... Monthly Growth Rate Slows Down

Household Loans Increase by 800 Billion Won, Growth Margin Slightly Expands

In January, household loans across the entire financial sector increased by 800 billion KRW. In the case of mortgage loans, the increase was somewhat reduced compared to the previous month, rising by 4.1 trillion KRW.

Apartment viewed from Yongsan-gu, Seoul on the 5th. Photo by Jinhyung Kang aymsdream@

The Financial Services Commission announced on the 14th that household loans across all financial sectors increased by a total of 800 billion KRW last month, marking a slight expansion of 600 billion KRW compared to the previous month’s increase of 200 billion KRW.

By loan category, mortgage loans increased by 4.1 trillion KRW, showing a slowdown in the growth rate compared to the previous month’s increase of 5 trillion KRW. Bank mortgage loans rose by 4.9 trillion KRW, slightly less than the previous month’s 5.1 trillion KRW increase, while mortgage loans in the secondary financial sector decreased by 800 billion KRW, with the decline widening. Other loans decreased by a total of 3.3 trillion KRW, with the reduction narrowing compared to the previous month’s 4.8 trillion KRW decrease.

By financial sector, household loans in the banking sector increased by 3.4 trillion KRW, slightly expanding from the previous month’s 3.1 trillion KRW increase. The slight decrease in bank mortgage loans was influenced by a significant reduction in policy mortgages. Bank-originated mortgage loans increased by 1 trillion KRW, but policy mortgages decreased by 1.2 trillion KRW. Other loans in the banking sector decreased by 1.5 trillion KRW, with the decline narrowing compared to the previous month.

Household loans in the secondary financial sector decreased by a total of 2.6 trillion KRW, narrowing the decline from the previous month’s 2.9 trillion KRW decrease. Mutual finance sector loans decreased by 2.5 trillion KRW and insurance sector loans decreased by 500 billion KRW, while loans from specialized credit finance companies increased by 400 billion KRW and savings banks increased by 100 billion KRW.

The financial authorities stated, “Although household loans in January slightly expanded compared to the previous month, we assess that they remain relatively stable at about one-quarter of the monthly average in the second half of last year. However, since the increase in bank-originated mortgage loans has somewhat expanded recently and the pace of household loan growth may fluctuate depending on market conditions, we will continue to closely monitor housing market trends and factors driving household loan increases. We plan to steadily implement policy tasks aimed at improving both the quantity and quality of household debt, such as reducing exceptions to the Debt Service Ratio (DSR), and restructuring the Korea Housing Finance Corporation’s business to promote private long-term mortgages.”

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