Household Loans, May 2025 — FSC — KR

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Household Loans, May 2025
Jun 11, 2025

In May 2025, the outstanding balance of household loans across all financial sectors rose KRW6.0 trillion (preliminary), growing at a faster pace compared with the previous month (up KRW5.3 trillion) .

(By Type)

Home-backed mortgage loans increased KRW5.6 trillion, rising at a faster pace compared with a month ago (up KRW4.8 trillion) . The faster pace of growth was seen in both the banking (up KRW3.7 trillion → up KRW4.2 trillion) and nonbanking (up KRW1.1 trillion → up KRW1.5 trillion) sectors.

Other types of loans increased KRW0.4 trillion, rising at a slightly slower pace compared with the previous month (up KRW0.5 trillion) , as credit loans expanded at a slower rate (up KRW1.2 trillion → up KRW0.8 trillion) .

(By Sector)

In May, household loans in the banking sector rose at a faster pace compared with the previous month (up KRW4.7 trillion → up KRW5.2 trillion) . Banks’ own mortgage loans grew at an expanded level (up KRW1.9 trillion → up KRW2.5 trillion) , while policy-based loans grew at a slightly slower pace (up KRW1.8 trillion → up KRW1.6 trillion) . Other types of loans in the banking sector rose at a similar pace compared with a month ago (up KRW1.0 trillion → up KRW1.0 trillion) .

In the nonbanking sector, household loans edged up KRW0.8 trillion, rising at a faster pace compared with the previous month (up KRW0.5 trillion) . Mutual finance businesses (up KRW0.3 trillion → up KRW0.8 trillion) saw a faster pace of growth, while savings banks (up KRW0.4 trillion → up KRW0.3 trillion) saw a slower pace of growth. Insurance companies (up KRW0.01 trillion → down KRW0.3 trillion) saw household loan growth shifting back lower, while specialized credit finance businesses (down KRW0.1 trillion → down KRW0.1 trillion) maintained the same level of decline compared with a month ago.

(Assessment)

The expanded pace of household loan growth in May can be seen as a consequence of the increase in housing transactions from February this year. As the volume of housing transactions continues to rise, it remains crucial to more effectively manage the pace of household debt growth.

In this regard, the financial authorities plan to first strengthen the management and supervision over financial companies’ handling of mortgage loans in the Seoul metropolitan area. To this end, banks are encouraged to strictly manage their lending practices to make sure that there is no excessive inflow of speculation-driven funds into the housing market. The Financial Supervisory Service (FSS) plans to closely monitor banks’ mortgage lending to see whether there are instances of regulatory circumvention.

Second, the financial authorities will continue to closely monitor individual banks’ monthly and quarterly lending targets and take more specific measures when needed to more effectively manage the pace of household debt growth. The financial authorities will also work to make sure a seamless implementation of the measures already announced to bring about improvements to the jeonse loan guarantee system in June and tighten the stressed debt service ratio (DSR) rules from July 1.

Third, the financial authorities will strengthen the provision of individually tailored financial support programs to make sure that lower income households and non-speculative homebuyers face no difficulties in securing loans. To this end, the authorities plan to look into the possibility of expanding the supply of policy-based mortgage loans within the initially planned amount for this year and increase the availability of microfinance support.