South Korea’s Financial Services Commission published additional measures to tighten household debt management following a government-led meeting with relevant ministries, industry groups, and housing loan and guarantee institutions. The package is framed as supporting the government’s housing supply expansion plan and responds to a pickup in household debt growth in August alongside rising housing prices in some regions. The measures lower the loan-to-value (LTV) ratio on mortgages for home purchases in speculation regulated areas to 40% from 50%. They also set the LTV ratio at 0% for mortgage loans to borrowers registered as private housing business entities (for purchasing and leasing) in the Seoul metropolitan area and/or speculation regulated zones, with potential exemptions for newly built housing units subject to approval by the Ministry of Land, Infrastructure and Transport. Separately, the maximum jeonse loan amount available to one-house owners will be standardised across three jeonse guarantee institutions (SGI, HF and HUG) at KRW 200 million in the Seoul metropolitan area and/or speculation regulated zones. The Financial Services Commission and related organisations plan to implement the measures from 8 September, with interim provisions for borrowers who entered housing agreements or applied for housing loans before that date. Financial companies will be inspected for compliance, and the authorities plan to hold regular meetings to monitor implementation.

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