South Korea Financial Services Commission reports May household loans rose KRW9.3 trillion and calls for tighter debt management

The South Korea Financial Services Commission published preliminary May 2026 household lending data showing the outstanding balance of household loans across all financial sectors rose KRW9.3 trillion, accelerating from a KRW3.5 trillion increase in the previous month. Mortgage loan growth slowed to KRW4.0 trillion from KRW5.5 trillion, but other lending rebounded to KRW5.3 trillion from a KRW2.0 trillion decline, with credit loans swinging to a KRW3.4 trillion increase from a KRW0.9 trillion fall. Banking sector household loans increased KRW6.9 trillion after rising KRW2.1 trillion in the previous month. Banks' own mortgage lending accelerated to KRW2.1 trillion, policy-based mortgage lending slowed to KRW1.1 trillion, and other loans rose KRW3.7 trillion after a KRW0.6 trillion decline. Nonbank household loans increased KRW2.3 trillion after KRW1.4 trillion in the previous month. Mutual finance growth slowed to KRW0.7 trillion, while insurance companies, specialized credit finance businesses and savings banks all returned to positive growth. The commission said mortgage lending eased despite recent increases in housing transactions and group lending for apartment subscription, while family month demand and stock market investment drove faster growth in credit loans and other borrowing. It warned that both credit and mortgage loan growth could accelerate in coming months and urged financial companies to adhere strictly to household loan management targets. The banking sector plans to tighten credit lending to high-income earners by reducing maximum loan limits and exempting early repayment fees, while financial authorities will hold weekly inspection meetings and may introduce additional policy tools if needed.