Household loans across the entire financial sector increased by 6 trillion won last month. This is attributed to the rise in housing transactions since February due to the partial lifting of land transaction permission areas in Seoul, and financial authorities have stated that they will pursue 'strong' policies to manage household loans.
According to data titled 'Trends in Household Loans for May 2025 (provisional)' released on the 11th by the Financial Services Commission and the Financial Supervisory Service, household loans in the financial sector were recorded as having increased by 6 trillion won last month. Household loans surged by 4.2 trillion won in February. Even in March when household loans typically decrease, there was an increase of 700 billion won, and in April, the increase expanded to 5.3 trillion won.
Mortgage loans increased by 5.6 trillion won in May alone. The increase in bank sector mortgage loans rose from 3.7 trillion won the previous month to 4.2 trillion won, while the second financial sector increased from 1.1 trillion won to 1.5 trillion won. The increase in credit loans was reduced from 1.2 trillion won to 800 billion won during the same period.
When examining by sector, household loans from banks increased by 5.2 trillion won. Mortgage loans are divided into banks' own products and policy lending products such as the DiDIMdol and BuTImok programs, with banks' own mortgage loans increasing by 2.5 trillion won and policy loans increasing by 1.6 trillion won. While the increase in banks' own mortgage loans expanded, the amount for policy loans decreased.
Household loans in the second financial sector increased by 800 billion won. Mutual finance (800 billion won) saw an expanded increase compared to the previous month, while savings banks (300 billion won) saw a decrease in the growth rate. Insurance (-300 billion won) turned to a decline, and the specialized finance companies (-100 billion won) remained unchanged from the previous month.
The Financial Services Commission held a 'Household Debt Review Meeting' on this day, chaired by Secretary-General Kwon Dae-young, to review and assess the trends of household debt for May and discuss future response plans. Representatives from the Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, Bank of Korea, Financial Supervisory Service, along with the Korean Bankers Association and the five major banks attended the meeting.
Financial authorities noted that as housing transaction volumes continue to increase, they will pursue stronger policies. Firstly, they will strengthen management and supervision over the mortgage loan practices of financial companies, focusing on the metropolitan area. Banks are to thoroughly manage whether excessive funds are flowing into the real estate market due to speculative demand, which may lead to excessive lending, while the Financial Supervisory Service will carry out focused inspections on whether there are instances of evasion of lending regulations in the process of mortgage loan handling by banks.
Each individual bank will be closely monitored for compliance with monthly and quarterly management targets, and specific measures will be taken regarding banks with a rapid increase in household loans. The financial authorities stated, 'The second financial sector will also closely manage lending practices and trends through sectoral associations.' Additionally, they confirmed that the three-tier stress total debt service ratio (DSR) lending regulations, scheduled to be implemented in July, will be carried out without any hitches.
Minister Kwon said, 'Household debt is still within a manageable range, but risk management is more important than ever.' He added, 'I urge financial companies to examine whether the household lending behavior has become somewhat looser compared to the beginning of the year.'