Financial Services Commission Announces January 2025 Household Loan Trends
Mortgage Loans Up 3.3 Trillion KRW from Previous Month
However, Growth Margin Slightly Narrows
Secondary Financial Sector Mortgage Loan Growth Also Narrows
Last month, household loans across the entire financial sector decreased by 900 billion KRW, marking a shift to a decline compared to the previous month. This was influenced by expanding domestic and international uncertainties and a slowdown in winter transactions. Among these, mortgage loans increased by 3.3 trillion KRW, narrowing the growth margin compared to the previous month (+3.4 trillion KRW). However, the scale of bank-sector mortgage loans approximately doubled compared to the previous month.
The Financial Services Commission announced on the 12th that household loans across the entire financial sector decreased by 900 billion KRW last month, marking a shift to a decline compared to the previous month.
The monthly increase in household loans was 5.2 trillion KRW in July 2024, 9.7 trillion KRW in August, 5.4 trillion KRW in September, 6.5 trillion KRW in October, 5 trillion KRW in November, and 2 trillion KRW in December, showing a steady upward trend. However, in January this year, it decreased by 900 billion KRW, halting the growth trend.
Mortgage loans increased by 3.3 trillion KRW, slightly narrowing the growth margin compared to the previous month (+3.4 trillion KRW). Other loans, such as credit loans, decreased by 4.2 trillion KRW during the same period, expanding the decline compared to the previous month (-1.4 trillion KRW).
By sector, bank-sector household loans increased by 1.7 trillion KRW in January this year, about twice the increase compared to the previous month (+800 billion KRW). However, the secondary financial sector saw an increase of 2.6 trillion KRW compared to the previous month (+1.6 trillion KRW), narrowing the growth margin.
In particular, bank-sector mortgage loans funded by banks' own resources decreased by 600 billion KRW, while policy loans such as Didimdol and Buteemok loans increased by 2.9 trillion KRW, surpassing the banks' own mortgage loans. Housing Finance Corporation's supply of products like the Bogeumjari Loan decreased by 600 billion KRW, showing differences in supply amounts among policy loan products.
Household loans in the secondary financial sector decreased by a total of 500 billion KRW. Savings banks increased by 200 billion KRW, Suhyup by 100 billion KRW, and Shinhyup by 100 billion KRW. However, insurance companies decreased by 500 billion KRW, and mutual finance and Nonghyup each decreased by 200 billion KRW.
The financial authorities cited expanding domestic and international uncertainties as factors for the decrease in household loans in January. They also assessed that seasonal factors such as holiday bonuses and a slowdown in winter housing transactions contributed to the decline in household loans.
However, the Financial Services Commission stated, "Bank-sector mortgage loans increased compared to the previous month due to the resumption of business at the beginning of the year and relaxation of self-management, and policy loans continue to show steady growth, so it is not a situation to be complacent about." They added, "With the full-scale start of business and moving demand for the new school term, household loans are likely to shift to an increasing trend from February, so we will continuously monitor housing market and interest rate trends."
They continued, "Recently, unsold houses have increased mainly in provincial areas, and the decline in construction investment continues, indicating a difficult situation. For the time being, we also plan to closely examine the status of fund supply to provincial areas."
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