Shinhan Bank Suspends Mortgage and Jeonse Loan Applications Through Brokers Until October

Shinhan Bank Suspends Loan Broker Applications Nationwide
Additional Lending Restrictions Target Household Loan Surge
Mortgage Credit Insurance Also Halted Until End of October

Shinhan Bank will not accept household loan applications through loan brokers until the end of October. This move comes as a response to criticism over the accelerating pace of household loan growth in the banking sector, prompting the bank to implement additional lending restrictions.

On August 12, Shinhan Bank announced that it would suspend applications for mortgage and jeonse loans through loan brokers until the end of October.

At the end of June, Shinhan Bank initially blocked applications for mortgages executed in July in the Seoul metropolitan area. In the following months, this restriction was expanded to cover loans executed in August and September. Now, the bank has decided not to accept applications for loans scheduled for execution in October as well. The suspension has also been expanded to include jeonse loans in addition to mortgages, and the affected regions have been broadened from the Seoul metropolitan area to nationwide.

Additionally, Shinhan Bank will not apply mortgage credit insurance (MCI) to new mortgages until the end of October. MCI is an insurance policy taken out simultaneously with a mortgage loan. Without this insurance, borrowers can only receive a loan for the amount excluding the small deposit guarantee, effectively reducing the maximum loan amount available.

Shinhan Bank explained that these additional regulatory measures are intended to manage household loans in a stable manner and to uphold the principle of supplying loans primarily to genuine end-users.

As of August 7, the outstanding balance of household loans at the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) stood at 760.8845 trillion won, an increase of 1.9111 trillion won compared to the end of July. This represents an average daily increase of approximately 273 billion won, more than double the July daily average of 133.5 billion won.