KB Kookmin Bank to Reduce Mortgage Loan Maturity and Limits Starting from the 29th

KB Kookmin Bank will reduce the maturity and limits of mortgage loan products to slow down household debt growth. Additionally, it will temporarily suspend the handling of land-backed loans, which have the potential to be used for speculative funds.

On the 26th, Kookmin Bank announced that starting from the 29th, it will fully implement the "Comprehensive Household Debt Management Measures" to support funds primarily for actual demand. The bank had already restricted refinancing loans and mortgage loans for multi-homeowners since last month, and this move further strengthens those measures.

First, to curb speculative demand, the limit for living stabilization fund loans secured by houses not intended for home purchase will be capped at a maximum of 100 million KRW. Also, the maximum loan period for home purchase funds in Seoul and the metropolitan area will be shortened from 40 years to 30 years.

Kookmin Bank explained, "When the loan period is shortened, the annual principal and interest repayment amount increases, resulting in a decrease in the loan limit. Considering the implementation of the second stage of the stress Debt Service Ratio (DSR), we expect this to stabilize loan demand related to home purchases in Seoul and the metropolitan area."

The bank will also suspend handling land (undeveloped land) secured loans that could be used for speculative funds, and limit the maximum loan amount for new automatic overdraft loans (minus loans) among unsecured loans to 50 million KRW.

Furthermore, when applying for mortgage loans, the bank will stop requiring mortgage insurance (MCI·MCG) enrollment and restrict the setting of grace periods. Without mortgage insurance, loans can only be granted up to the amount after deducting regional small rental deposits (55 million KRW in Seoul, 48 million KRW in Gyeonggi Province, and 25 million KRW in other regions), effectively reducing loan limits for real estate in Seoul and the metropolitan area. In addition, the bank will temporarily suspend the transfer of jeonse loans held at other banks to Kookmin Bank at branches.

This measure is a temporary system operated to suppress speculative demand and is designed not to restrict mortgage loan applications. A Kookmin Bank official stated, "This plan is a temporarily operated measure, and detailed plans have been prepared to ensure smooth fund supply to actual demanders. We will continue to closely monitor the household debt situation and respond proactively."