Household Loans Increased by 9.8 Trillion Won in August Compared to Previous Month... "Impact of Mortgage Loans"

"Timely Implementation of Additional Measures Planned"

Last month, the scale of household loans in the financial sector significantly expanded compared to the previous month due to an increase in mortgage loans. Financial authorities emphasized that they will promptly implement additional management measures currently under review.

According to the Financial Services Commission and the Financial Supervisory Service on the 11th, household loans across all financial sectors increased by 9.8 trillion KRW in August, a significant expansion compared to 5.2 trillion KRW in July. In particular, mortgage loans increased by 8.5 trillion KRW, a sharp rise from 5.4 trillion KRW in the previous month. Other loans increased by 1.3 trillion KRW as both the banking sector (1.1 trillion KRW) and the secondary financial sector (200 billion KRW) shifted to an increase.

Regarding this, financial authorities stated, "The sharp increase in household loans in August compared to the previous month is due to the real estate price rise centered in Seoul and the metropolitan area, last-minute demand before the implementation of the second-stage stress DSR, and stock investment demand."

Looking at each sector, the increase in household loans in the banking sector expanded significantly compared to the previous month. Household loans in the secondary financial sector shifted from a declining trend to an increase. Household loans in the banking sector increased by 9.3 trillion KRW, up from 5.4 trillion KRW in the previous month. This was due to the expansion of mortgage loan increases (56 trillion KRW → 82 trillion KRW) driven by the real estate price rise centered in Seoul and the metropolitan area. Other loans turned to an increase (1.1 trillion KRW) compared to the previous month due to an increase in unsecured loans.

The increase in household loans in the secondary financial sector turned to an increase compared to the previous month, with mortgage loans and other loans increasing by 300 billion KRW and 200 billion KRW, respectively. Credit card companies (700 billion KRW) and savings banks (400 billion KRW) continued their upward trend, while mutual finance cooperatives maintained a declining trend. Insurance loans also turned to an increase of 300 billion KRW.

Regarding future prospects, financial authorities said, "From September, with the implementation of the second-stage stress DSR, strengthened stress interest rates are being applied to mortgage loans in the metropolitan area handled by banks. Banks are also strengthening voluntary household loan management efforts, so the increase in household debt is expected to ease somewhat." However, they added, "Since household debt growth can expand at any time due to autumn moving demand, rising real estate prices, and expectations of interest rate cuts, we will closely monitor the patterns and trends of household debt increases, including mortgage loans, unsecured loans with potential balloon effects, and secondary financial sector loans."

They also stated that if the housing market overheats or household debt rapidly increases, they will implement additional management measures currently under review, urging, "We hope banks and other financial companies will take responsibility and thoroughly manage loans."