The South Korea Financial Services Commission (FSC) published preliminary data showing household loans across all financial sectors rose by KRW 37.6 trillion in 2025, a slower year-on-year growth rate than at end-2024 (2.3 percent versus 2.6 percent). December 2025 also marked a monthly decline in outstanding household loans of KRW 1.5 trillion after increases in November 2025 and December 2024, alongside a continued decline in the household debt to GDP ratio to 89.3 percent as of Q3 2025. In 2025, mortgage lending growth slowed (KRW 52.6 trillion versus KRW 58.1 trillion in 2024) while other household loans contracted by KRW 15.0 trillion (following a KRW 16.5 trillion decline in 2024). By sector, banking-sector household loans rose by KRW 32.7 trillion (KRW 46.2 trillion in 2024) and the nonbanking sector returned to expansion at KRW 4.8 trillion (after a KRW 4.6 trillion decline in 2024), with mutual finance up KRW 10.5 trillion offsetting declines in specialized credit finance, insurance, and savings banks. In December 2025, the banking sector shifted from growth to a KRW 2.2 trillion fall, including a KRW 0.7 trillion decline in bank mortgage loans and a KRW 1.5 trillion drop in other loans, while the nonbanking sector increased by KRW 0.7 trillion, driven by faster mortgage growth but a reversal to contraction in other loan types. Alongside the data, the FSC pointed to household debt management measures including implementation of the third-stage stressed debt service ratio rule and advised financial companies to adhere to household loan management targets early in 2026 while avoiding excessive competition. At a household debt management meeting, it also introduced detailed plans to adjust housing finance rules by requiring financial companies to contribute to a housing finance credit guarantee fund based on housing loans issued, with base contribution rates ranging from 0.05 percent to 0.30 percent depending on the amount of housing loans (mortgage loans and jeonse loans) issued by each firm.
South Korea Financial Services Commission 2026-01-14
South Korea Financial Services Commission reports eased 2025 household loan growth and outlines housing loan guarantee fund contribution rates
The South Korea Financial Services Commission reported slower growth in household loans in 2025, with a KRW 37.6 trillion increase from 2024, and a decline in the household debt to GDP ratio to 89.3% as of Q3 2025. The FSC highlighted debt management measures, including the third-stage stressed debt service ratio rule and plans to adjust housing finance rules, requiring financial companies to contribute to a housing finance credit guarantee fund based on issued housing loans.