Government Demand-Suppression Policies... New Mortgage Lending Turned to Decline in Q4 Last Year

BOK "Preliminary Household Debt Statistics by Borrower for the Fourth Quarter of 2025"

In the fourth quarter of last year, the amount of new mortgage loans per borrower turned to a decline, falling to its lowest level since the second quarter of last year. This was the result of the government's demand-suppression measures, such as the October 15 housing market stabilization package, taking effect. However, some analysts see a possibility of a slight rebound in the first quarter of this year, due to seasonal demand from moves at the start of the new school term and the scheduled end in May of the temporary suspension of heavier capital gains tax on multi-homeowners.

A view of densely clustered apartment buildings in central Seoul from Namsan. Yonhap News

According to the Bank of Korea's preliminary "Household Debt Statistics by Borrower for the Fourth Quarter of 2025" released on the 24th, the amount of new mortgage loans per borrower in the fourth quarter of last year was 212.86 million won, down 14.21 million won from the previous quarter.

By age group, the amount declined across all brackets, including the 30s (down 32.59 million won) and 40s (down 13.16 million won), which account for a large share. For those in their 60s and older (down 7.21 million won), it was the lowest since the first quarter of 2023. By region, the Seoul metropolitan area fell by 37.14 million won to 242.08 million won, the lowest since the first quarter of last year. The Honam region also decreased by 1.32 million won. By sector, banks saw a decline of 20.96 million won.

Looking at the share of new mortgage loan amounts per borrower (on a total-amount basis) by borrower characteristics and usage patterns, borrowers in their 30s (37.1%), residents of the Seoul metropolitan area (53.7%), and bank loans (69.0%) accounted for a high proportion.

For the full year of last year, the amount of new mortgage loans per borrower stood at 216.01 million won.

In the fourth quarter of last year, the amount of new household loans per borrower was 34.43 million won, down 4.09 million won from the previous quarter. Min Sukhong, head of the Household Debt Microstatistics Team at the Bank of Korea's Economic Statistics Department 1, explained, "Due to the impact of housing market stabilization measures such as the October 15 package, both the amount of new household loans and the number of borrowers decreased compared with the previous quarter, and this result reflects the decline in new loans among borrowers in their 30s, residents of the Seoul metropolitan area, bank borrowers, and mortgage borrowers, all of whom typically have higher average new loan amounts."

By age group, all brackets saw declines, with borrowers in their 30s (down 8.18 million won) showing the largest drop. By region, the Seoul metropolitan area (down 8.08 million won), the Chungcheong region (down 1.99 million won), and the Honam region (down 1.43 million won) all decreased from the previous quarter. In contrast, the Gangwon-Jeju region (up 5.11 million won), the Daegyeong region (up 2.44 million won), and the Dongnam region (up 610,000 won) saw increases.

By sector, banks (down 8.89 million won) recorded a decrease, while non-bank financial institutions (up 610,000 won) and others such as securities and insurance companies (up 150,000 won) recorded increases. By product type, mortgages (down 14.21 million won), jeonse deposit loans (down 14.14 million won), and unsecured credit loans (down 900,000 won) all declined.

In terms of amount share, borrowers in their 30s (28.9%), residents of the Seoul metropolitan area (57.6%), bank loans (50.3%), and mortgage loans (40.9%) continued to account for a high proportion.

At the end of the fourth quarter of last year, the outstanding balance of household loans per borrower was 97.39 million won, up 650,000 won from the previous quarter. Mortgage loans stood at 158.27 million won, an increase of 2.01 million won from the previous quarter. The shares were high among borrowers in their 40s (28.8%), residents of the Seoul metropolitan area (58.8%), bank loans (61.6%), and mortgage loans (51.6%).

For the full year of last year, the amount of new household loans per borrower came to 36.73 million won. Min said, "Due to the government's successive real estate measures (such as those announced on June 27 and October 15 last year), the amount of new household loans per borrower in the fourth quarter decreased, leading to these results."

He added that there is a possibility of a turnaround to growth in the first quarter of this year. Min projected, "There is a possibility of a slight increase in the first quarter, due to moving demand for the new school term and the impact of the end of the temporary suspension of heavier capital gains tax on multi-homeowners."