The Bank of Korea has published a study using a new household-level consumer credit panel to assess debt risks across entire households rather than individual borrowers. The analysis finds that aggregate delinquency risk would remain broadly stable after an interest rate increase, but highly leveraged home-purchasing households and low-income households face greater vulnerabilities. It also identifies substantial potential for delinquency to spread between household members and for high debt-service burdens to constrain consumption. The monthly panel links debt, assets, income and expenditure data for 2.06 million households, representing 9.2% of the household population. Under a 1 percentage point interest rate increase, the delinquency probability of highly leveraged home-purchasing households rises by an estimated 0.81 percentage points. When one member of these households becomes delinquent, another member has an 8.8% probability of becoming delinquent within 12 months, compared with 4.6% among existing homeowner households. The study estimates that consumption begins to decline when principal and interest repayments exceed 46% of household income. In 2025, 11.1% of indebted households exceeded this threshold, including 14.5% of households in the lowest income quintile, up from 11.4% in 2021. The findings support using household-level data alongside borrower-level analysis, closely monitoring highly leveraged homebuyers and considering targeted measures to ease repayment burdens among vulnerable households.

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