The South Korea Financial Services Commission published preliminary February 2025 figures showing the outstanding balance of household loans across all financial sectors increased by KRW 4.3 trillion, reversing a KRW 0.9 trillion decline in the prior month. The pickup was driven by faster growth in home mortgage lending, while other loan categories contracted more slowly and credit loans returned to modest growth. Home mortgage loans rose KRW 5.0 trillion, up from KRW 3.2 trillion a month earlier, with banking-sector mortgages accelerating to KRW 3.5 trillion from KRW 1.7 trillion while nonbank mortgage growth remained at KRW 1.5 trillion. Other loans fell KRW 0.6 trillion compared with a KRW 4.1 trillion drop in the previous month, as credit loans shifted from a KRW 1.5 trillion decline to a KRW 0.1 trillion increase. By sector, banking household loans increased KRW 3.3 trillion, led by faster growth in policy-based loans (KRW 2.9 trillion from KRW 2.2 trillion) and a turnaround in banks’ own mortgage loans (KRW 0.6 trillion from minus KRW 0.6 trillion); nonbank household loans increased KRW 1.0 trillion, with mutual finance and specialized credit finance returning to growth, savings banks recording a small decline, and insurance-sector household loans contracting more slowly. The FSC attributed February’s increase to lenders beginning to extend credit under newly set annual issuance plans and to rising housing transactions ahead of the new school year, while noting expectations of higher repayment of policy loans and easing mortgage demand in March. It also flagged concerns over potential housing price increases in some Seoul areas where housing regulations have been eased and said financial authorities will maintain a consistent household debt management stance, monitor housing market and mortgage-loan trends with relevant ministries, and take preemptive measures against excessive market anxiety, speculation, or disturbance.
South Korea Financial Services Commission 2025-03-12
South Korea Financial Services Commission reports household loans rose KRW 4.3 trillion in February 2025 as mortgage lending accelerated
The South Korea Financial Services Commission reported a KRW 4.3 trillion increase in household loans for February 2025, reversing a KRW 0.9 trillion decline from the previous month, driven by accelerated home mortgage lending. Banking-sector mortgages rose to KRW 3.5 trillion, while nonbank mortgage growth remained stable at KRW 1.5 trillion. The FSC attributed the rise to new credit issuance plans and increased housing transactions, while expressing concerns over potential housing price increases in Seoul and committing to monitor and manage household debt and market trends.