Rate Cuts and Mortgage Regulations Drive 500 Billion Won Increase in Major Banks' Home Loans in Two Weeks
by Lee Kimin
Published 18 Apr.2026 08:00(KST)
Updated 20 Apr.2026 10:28(KST)
As of April 15, outstanding mortgage loans at the five major banks reached 610.855 trillion won
Up 521.1 billion won from the end of last month
Fixed rates above 7% fell by 0.26 percentage points, while distressed sales boosted demand
The outstanding balance of mortgage loans at the five major commercial banks has increased by approximately 500 billion won in just two weeks. This is attributed to a slight decline in loan interest rates compared to the previous month, as well as a rush of demand from those considering home purchases and loan extensions ahead of the government’s impending tightening of mortgage regulations.
According to the financial sector on April 18, as of April 15, the outstanding balance of mortgage loans at the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) stood at 610.855 trillion won, marking an increase of 521.1 billion won compared to the end of the previous month. After reaching 611.6081 trillion won at the end of December last year, the balance dropped sharply to 610.1245 trillion won at the end of January this year, then fluctuated-rising to 610.7211 trillion won at the end of February and 610.3339 trillion won at the end of March.
The fluctuations in household and mortgage loan balances at the five major commercial banks have been highly sensitive to the government’s real estate policies and interest rate changes. In January, balances fell due to the government’s household debt management stance, loan repayments made using year-end bonuses, and the movement of funds into the stock market (money move). However, in February, the balance increased again as moving demand rose. In March, the balance of mortgage loans declined once more as mortgage rates rose in the wake of the Middle East war.
Mortgage Rates, Which Had Been Soaring, Begin to Fall This Month
The sharp rise in mortgage rates has started to reverse this month as war-related risks have eased, stimulating previously suppressed demand for mortgage loans.
Since last month, the inflow of low-cost deposits for risk avoidance has reduced funding costs, and expectations for an end to the war have pushed down bond yields, lowering both fixed and variable mortgage loan rates. As of April 15, the variable mortgage rate (6-month) was 3.66-6.06%, up 0.05 percentage points at both the upper and lower ends compared to the previous month. However, for the four banks excluding Nonghyup Bank, variable mortgage rates fell by 0.19 percentage points at the lower end and 0.17 percentage points at the upper end compared to the previous month, settling at 3.73-5.4% per annum.
Fixed mortgage rates, which exceeded 7% at the upper end for the first time in three years and five months at the end of last month (4.42-7.02%), dropped by 0.26 percentage points at both the upper and lower ends to 4.16-6.76% as of April 15. This reflects the decline in the five-year bank bond (unsecured AAA) yield, which serves as an indicator for fixed rates, from 4.051% at the end of last month to 3.809% on April 15, a decrease of 0.242 percentage points.
Urgent Sales Surge Amid Various Real Estate Regulations... Banks Say "Mortgage Balances Will Grow at Banks with Lower Rates First"
Within the banking sector, there is speculation that, alongside falling interest rates, the government’s visible real estate regulations and the emergence of urgent sales have prompted previously hesitant customers to switch to buying. Starting April 17, extensions of mortgage loans for apartments in the Seoul metropolitan area and regulated regions held by multiple homeowners are, in principle, prohibited. From May 9, the temporary suspension of additional capital gains tax for multiple homeowners will also end. As a result, urgent sales of apartments in Seoul have increased and prices have adjusted, leading to greater buying demand-analyzed as the main driver behind the rise in outstanding mortgage balances.
According to the nationwide apartment actual transaction price index compiled by Korea Real Estate Board, the provisional index for Seoul apartments contracted in March is projected to fall by 0.59% compared to the previous month. If finalized, this would mark the first decline in seven months since August 2025 (-0.07%). In addition, according to the Seoul Real Estate Information Plaza’s land transaction permit records, from April 1 to 17 this year, there were 5,392 approved residential land transactions (excluding cancellations, withdrawals, and denials), an increase of 40.8% (1,563 cases) compared to 3,829 cases during the same period in February.
A banking sector official stated, "Compared to last month, when interest burdens were high due to the Middle East war, interest rates have stabilized, and there is a trend of demand emerging to secure low-priced properties before regulatory policies take effect. For the time being, mortgage loan balances are expected to continue increasing, especially at banks with more competitive interest rates."
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