Woori Bank has decided to completely halt loans for the purpose of purchasing additional housing in the Seoul metropolitan area if the borrower already owns at least one house. Jeonse (long-term deposit lease) loans will only be provided to non-homeowners who do not own any housing among all household members.
Woori Bank announced on the 1st that it will implement the "Real Demand-Centered Household Debt Efficiency Plan" containing these measures starting from the 9th. The plan aims to curb speculative demand while efficiently managing household debt focused on essential real demand.
However, Woori Bank will allow loans under the condition that the existing house is disposed of due to timing mismatches during moving, to minimize disadvantages for real demand borrowers, and will continue to support purchase funds for non-homeowners without interruption. Additionally, in the case of jeonse loans, if it is a jeonse extension or if the jeonse contract was signed and the deposit paid before the 8th, even homeowners will be supported with jeonse loans to minimize confusion.
Woori Bank also plans to restrict requests for refinancing housing mortgage loans from other banks at its branches. However, refinancing services using refinancing loan infrastructure will continue to be allowed to reduce the interest burden on financial consumers.
The maximum loan term for housing mortgage loans will be reduced from the existing 40 years to 30 years. The bank plans to naturally reduce borrowers' loan limits by inducing an increase in the Debt Service Ratio (DSR), which ensures loans are taken within a repayable range relative to income. With this DSR increase, for example, a borrower with an annual income of 50 million KRW taking a loan at an interest rate of 4.5% will see their loan limit decrease from 370 million KRW to 325 million KRW, a reduction of 45 million KRW (about 12%).
Meanwhile, apartment move-in fund loans will be operated mainly for projects where Woori Bank previously handled relocation or interim payments, with limited participation in other projects. This aims to restrain excessive competition among banks so that only the necessary funds flow to financial consumers.
A Woori Bank official stated, “Due to the continued increase in household loans recently, we have decided to implement loan management measures to prevent speculative demand. However, supply to low-income groups such as non-homeowners and real demand borrowers will continue to enhance the overall efficiency of household loan operations.”
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