The South Korea Financial Services Commission published preliminary data showing the outstanding balance of household loans across all financial sectors increased by KRW 41.6 trillion in 2024, a 2.6% rise and faster growth than in 2023. In December 2024, the outstanding balance rose by KRW 2.0 trillion, slowing from the KRW 5.0 trillion increase in the prior month. In 2024, mortgage loans grew faster than a year earlier (increase of KRW 57.1 trillion versus KRW 45.1 trillion), while other loan types declined by less (down KRW 15.5 trillion versus down KRW 35.0 trillion). By sector, banking-sector household loans rose more than in 2023 (up KRW 46.2 trillion versus up KRW 37.1 trillion), while the nonbanking sector’s decline narrowed (down KRW 4.6 trillion versus down KRW 27.0 trillion); within nonbanks, household loans rose in specialized credit finance (up KRW 3.2 trillion), savings banks (up KRW 1.5 trillion) and insurance (up KRW 0.5 trillion) but fell in mutual finance (down KRW 9.8 trillion). In December, banking-sector household loans shifted to a KRW 0.4 trillion decline as bank mortgage growth slowed (up KRW 0.8 trillion) and other bank loans fell (down KRW 1.1 trillion), while nonbank household loans increased by KRW 2.3 trillion, led by mutual finance (up KRW 2.2 trillion). The Commission linked the 2024 acceleration from April to lower loan rates and increased housing transactions in the Seoul metropolitan area, with a slowdown since September attributed to tightened stress debt service ratio rules and financial firms’ self-regulatory efforts. It also cited household debt-to-GDP of 90.8% in Q3 2024 and indicated that, in 2025, financial authorities will continue encouraging firms to contain household debt growth within the level of annual economic growth based on repayment capacity.

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