Household Loans at Five Major Banks Decrease in March... Home Mortgages Drop by Nearly 400 Billion Won

Last month, household loans at the five major banks turned to a decline after two months. Home mortgage loans fell by nearly 400 billion won in just one month. This is seen as a result of the government's strict total loan management, coupled with higher market interest rates driven by instability in the Middle East, which weakened loan demand.

Yonhap News Agency

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According to the banking sector on April 1, the balance of household loans at KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank at the end of March stood at 765.729 trillion won, which is a decrease of 136.4 billion won compared to the end of February. Household loans had decreased for two consecutive months in December of last year and January of this year, showed a temporary increase in February, but then declined again in March.

The decrease was particularly pronounced in home mortgage loans. The balance of home mortgage loans at the five major banks dropped from 610.7211 trillion won at the end of February to 610.3339 trillion won at the end of March, a decrease of 387.2 billion won. This marked the first time in one year and ten months since March 2024 (when it fell by 449.4 billion won) that the end-of-month balance of mortgage loans at the five major banks decreased compared to the previous month, following a decrease of 1.4836 trillion won in January 2024. After that, the decline resumed after two months of increases.

In contrast, unsecured loans switched to an increase. At the end of March, the balance of unsecured loans stood at 104.6595 trillion won, up 347.5 billion won from the end of February. After three consecutive months of decline since December last year, unsecured loans turned to an increase. This is interpreted as being partly due to the inflow of so-called "debt investment" demand amid a rising stock market.

Meanwhile, as the government decided to further strengthen total household loan management, loan approval is expected to become even more difficult. In the household debt management plan for 2026 announced on this day, the government set the target household loan growth rate for this year at 1.5%. In particular, for home mortgage loans, a separate management target will be introduced in the banking sector as a priority.

In deposits, there was a clear shift in fund movements. The balance of time deposits dropped by 943.32 billion won to 937.4565 trillion won, and installment savings also decreased by 251.2 billion won. In contrast, demand deposits increased by 1.50477 trillion won to 699.9081 trillion won, marking a second consecutive month of growth. As uncertainty rises during this period of increasing interest rates, the amount of idle funds is expanding.

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