Household Loans Surge by 2.9 Trillion Won in February... Growth Accelerates

Expansion of Bank Policy Loans and Secondary Financial Sector Lending

Financial Services Commission: "Driven by New School Year Moving Demand and Increased Group Loans in Mutual Finance"

Variable: End of Grace Period for Capital Gains Tax Surcharge on Multiple Home Owners May Increase Supply

Household loans in the financial sector increased by 2.9 trillion won last month, with the growth accelerating compared to the previous month. This was driven by an expansion in policy loans from banks and an increase in household loans from the secondary financial sector. With the grace period for the capital gains tax surcharge on multiple home owners ending in March, there is a possibility that demand for mortgage loans will rise. In addition, a balloon effect towards the secondary financial sector may further expand the volume of household loans next month.

Yonhap News Agency

According to the "Household Loan Trends for February 2026 (provisional)" released by the Financial Services Commission on March 11, total household loans across all financial sectors increased by 2.9 trillion won, accelerating from an increase of 1.4 trillion won in the previous month. This was due to a rise in both policy loans from banks and household loans from the secondary financial sector.

The Financial Services Commission explained, "Although banks’ own mortgage loans have declined for four consecutive months, the scale of increases in policy loans and household loans from the secondary financial sector has expanded. This is due to seasonal factors, such as moving demand at the start of the new school year, and continued growth in group loans, particularly among mutual finance institutions such as agricultural cooperatives and community credit cooperatives."

Looking only at mortgage loans, the total amount increased by 4.2 trillion won across all financial sectors, reflecting a larger increase than in the previous month. Bank mortgage loans, which declined last month, also grew by 400 billion won. In the secondary financial sector, the increase rose slightly from 3.6 trillion won in the previous month to 3.8 trillion won last month.

Other types of loans decreased by 1.2 trillion won, with the pace of decline easing compared to the previous month’s decrease of 1.6 trillion won. Unsecured loans also saw a smaller decrease, narrowing from a decline of 1.1 trillion won in the previous month to 1 trillion won last month.

By sector, bank household loans decreased by 300 billion won last month, with the decline moderating compared to the 1 trillion won decrease in the previous month. Specifically, banks’ own mortgage loans saw a smaller reduction, while policy loans experienced greater growth. In contrast, other types of loans saw a larger decrease.

The increase in household loans from the secondary financial sector accelerated. This is interpreted as a balloon effect, with stricter bank lending standards causing loan demand to shift to the secondary financial sector. Last month, household loans from the secondary financial sector increased by 3.3 trillion won, up from 2.5 trillion won in the previous month. Mutual finance institutions saw a greater increase, and both insurance companies and credit card companies returned to growth. In contrast, savings banks reversed course and posted a decrease.

There is a possibility that the upward trend in household loans will continue next month. This is because the end of the grace period for the capital gains tax surcharge on multiple home owners could lead to an increase in supply and, consequently, greater demand for mortgage loans.

The financial authorities stated that, together with the Ministry of Land, Infrastructure and Transport and the Ministry of the Interior and Safety, they plan to respond proactively and immediately to ensure that increased volatility in household loans does not lead to instability in the housing market.

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