South Korea’s Financial Supervisory Service, together with the Financial Services Commission, published preliminary August 2025 household loan figures showing outstanding household lending across all financial sectors rose by KRW 4.7 trillion, accelerating from KRW 2.3 trillion in the prior month but well below the KRW 9.7 trillion increase recorded in August 2024. The increase was driven mainly by home-backed mortgage lending. By type, mortgage loans increased by KRW 5.1 trillion (from KRW 4.2 trillion in the prior month), while other loans fell by KRW 0.4 trillion, with the contraction in credit loans easing to KRW 0.3 trillion. By sector, banking-sector household loans rose KRW 4.2 trillion, supported by banks’ own mortgage products (KRW 2.7 trillion) and steady growth in policy-based loans (KRW 1.2 trillion), while other bank loans swung to a KRW 0.3 trillion increase. Nonbank household loans grew KRW 0.6 trillion after a KRW 0.5 trillion decline, led by mutual finance (KRW 1.2 trillion) and a small rise at savings banks (KRW 0.03 trillion), while insurance companies and specialized credit finance businesses continued to decline by KRW 0.4 trillion and KRW 0.2 trillion respectively. The authorities attributed the monthly pickup mainly to seasonal mortgage demand ahead of the new semester, increased housing transactions leading up to August, and higher demand for credit loans during the summer vacation season, while noting risks from rate-cut expectations and rising house prices. They will continue close monitoring and, as previously announced on September 7, will carry out on-site inspections to check financial companies’ implementation and compliance with strengthened housing loan regulations, alongside regular meetings with related organizations and financial firms.

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