The outstanding balance of household loans decreased by 2.2 trillion won last month, marking the first net decrease since the beginning of this year. This is interpreted as being due to factors affecting the housing market, such as a decline in home transaction volumes and new unit supply. To prevent a year-end lending cliff, financial authorities will review handling status, including exceptionally applying total volume regulations on household loans to newly built residential complexes.
The Financial Services Commission announced on the 15th that household loans across all financial sectors decreased by 2.2 trillion won compared to the end of the previous month. This marks the first time this year that the outstanding balance of household loans has declined, following a net decrease of 1.2 trillion won in December last year.
Mortgage loans (hereinafter referred to as mortgages) increased by 3.3 trillion won, but the increase narrowed by approximately 1 trillion won compared to the previous month's increase of 4.3 trillion won. Other loans, including credit loans, decreased by 5.5 trillion won, significantly expanding the decrease from 1.5 trillion won in the previous month. This is due to credit loans decreasing by 3 trillion won alone last month.
By sector, household loans at banks increased by 600 billion won, a significant narrowing of the increase compared to 3.5 trillion won in the previous month. The increase in bank-specific mortgages narrowed from 2.9 trillion won in August to 1.8 trillion won in September. Policy-based loans increased by 1.1 trillion won, maintaining the level of the previous month. Other loans decreased by 2.3 trillion won, expanding the decrease compared to 600 billion won in the previous month.
Household loans at non-bank financial institutions decreased by 2.8 trillion won. The decrease also expanded significantly compared to 700 billion won in the previous month. Mutual finance, insurance, and specialized credit finance companies all saw expanded decreases, while savings banks also decreased by 400 billion won, turning to a downward trend.
The Financial Services Commission held a joint household debt review meeting on this day, chaired by Secretary-General Shin Jin-chang, with relevant institutional investors participating. Secretary-General Shin stated, "Household loans in September recorded the first net decrease of the year due to the slowing growth of mortgages and the expanded decrease in other loans," evaluating that "this is attributed to housing market influences such as decreased home transaction volumes and new unit supply, as well as seasonal factors including quarter-end non-performing loan (NPL) sales and write-offs, and holiday bonuses."
He said, "As we have recently adjusted the total volume management target for household loans upward and are managing group loans separately from each financial company's total volume target, concerns over the occurrence of a year-end lending cliff will be limited."
Secretary-General Shin urged, "In accordance with the the 13th measures, since group loans for newly built residential complexes have been 100% excluded from each financial company's total volume target, please thoroughly verify and review within the financial sector to ensure that actual demanders can receive loans without hindrance according to their funding plans anticipated at the time of purchase."
In accordance with the the 13th measures, policies to resolve the marriage penalty for Home Loan (Bogijjari-ron) and strengthen support for special-purpose rental loan guarantees for young people without housing will be implemented starting from the 19th.
For the Home Loan, eligibility is granted if one spouse's annual income is 70 million won or less. Previously, newlywed couples had to have an income of 85 million won or less. The special-purpose rental loan guarantee for young people will be expanded from those aged 34 and under to those aged 39 and under, and the guarantee limit will increase from 200 million won to 300 million won (for newlyweds and families with children).
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