The South Korea Financial Services Commission published provisional September household lending data showing a KRW 2.2 trillion decline across the financial sector, reversing August’s increase and marking the first monthly contraction since December 2025. Mortgage lending still rose by KRW 3.3 trillion, down from KRW 4.3 trillion in August, while other lending fell by KRW 5.5 trillion as the decline in credit loans widened to KRW 3 trillion. Bank household lending increased by KRW 600 billion, while lending by nonbank institutions fell by KRW 2.8 trillion. The commission also reviewed implementation of its Aug. 13 housing finance package. From Oct. 19, the Bogeumjari policy mortgage income test for newlyweds will permit eligibility where either spouse earns no more than KRW 70 million annually. The special rental deposit loan guarantee for young people will expand its age limit from 34 to 39, with the guarantee cap rising from KRW 200 million to KRW 300 million for newlyweds and families with children. Financial institutions were instructed to check lending availability for new housing developments after relocation, interim payment and balance loans were fully excluded from firm-level aggregate lending targets. The commission assessed the risk of a year-end lending cliff as limited following the increase in the 2026 household lending growth target from 1.5% to about 3%, but called for continued monitoring of house price expectations and credit loan volatility.

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