Overdraft Facility Holders May Qualify for 70% Mortgage Loans Ahead of 2026 Regulatory Tightening

Borrowers currently using an overdraft facility (hereinafter referred to as 'matoong') at their primary bank may still have the possibility of securing a mortgage loan (hereinafter referred to as 'judamdae') up to a 70% Loan-to-Value (LTV) ratio. This suggests that it is a critical time to strategically demonstrate individual repayment capacity, maximizing the current preferential conditions and loan limits offered by financial institutions, in anticipation of stricter financial regulations set to be implemented in 2026. The impact of holding a matoong on future mortgage loan limit calculations and the establishment of personalized strategies to prepare for these changes have become increasingly important.

Outlook on Mortgage Loan Limits and DSR Regulation Tightening (Post-2026)

Introduction of DSR Phase 2 in 2026: Predicting the Burden of Variable Rate Loan Repayments

Starting in 2026, the Debt Service Ratio (DSR) regulation is scheduled to be tightened to Phase 2. Currently, a 40% DSR regulation (with differentiated application by region) applies to credit loans and other loans exceeding 100 million KRW annually, and this will be expanded to all new mortgage loans and credit loans. This enhanced regulation means that borrowers who already possess credit loans, such as matoong, may face a significant reduction in their mortgage loan limits when seeking additional funding for home purchases. Particularly during periods of rising interest rates, the interest payments on variable rate mortgage loans are likely to increase, which can negatively impact DSR calculations. Therefore, thorough repayment planning is essential before the financial regulations are strengthened.

In fact, according to the Financial Supervisory Service, DSR regulations are establishing themselves as a key policy tool to guide a soft landing for household debt. With the introduction of DSR Phase 2 in 2026, borrowers with the same income level are likely to receive lower mortgage loan limits than before. This could have the effect of suppressing demand for loans in the real estate market, requiring individuals planning to purchase a home to re-evaluate their funding strategies.

Matoong Ownership: The Intersection of Disadvantage in Mortgage Limit Calculation and Current Advantage

At present, depending on the internal criteria and preferential policies of individual financial institutions, it is possible for borrowers to have their mortgage loan limit calculated up to 70% LTV even if they hold a matoong. This scenario is possible when financial institutions highly evaluate a borrower's overall creditworthiness and future repayment ability. However, after the implementation of the DSR Phase 2 regulation in 2026, the outstanding balance of all credit loans, including matoong, will be included in the DSR calculation. Consequently, for individuals with the same annual income, a larger matoong balance will result in a significantly lower mortgage loan limit. Therefore, considering the time constraint of the regulatory reinforcement, utilizing the current advantageous conditions to the fullest becomes even more crucial.

These changes also affect borrowers who have used matoong solely as a short-term liquidity tool. The fact that the entire agreed-upon limit of a matoong can be included in the DSR calculation can place a substantial burden on managing debt-to-income ratios. Financial institutions are expected to strengthen their loan screening criteria to increase DSR compliance rates, which could lower lending accessibility for potential borrowers.

Analysis of Mortgage Loan Limits and Preferential Interest Rate Conditions by Financial Institution

Preferential Mortgage Rates and Limit Policies for Matoong Holders by Financial Institution

Major commercial banks and internet-only banks are operating policies that offer preferential mortgage interest rates of up to 0.5%p or more, or additional loan limits, to matoong holders who meet specific conditions. For instance, customers who consistently build transaction history with the bank as their primary financial institution may be granted additional limits. Furthermore, customers with a track record of faithfully repaying their matoong may receive interest rate discounts. These preferential conditions vary by financial institution and are determined by a comprehensive evaluation of the customer's income level, credit score, existing financial transaction history, and assets held.

Notably, some financial institutions positively assess the creditworthiness of matoong users, thereby applying more favorable conditions when calculating mortgage loan limits. This is because consistently engaging in financial transactions and demonstrating diligent repayment through a matoong can act as a positive credit evaluation factor for customers. However, these benefits are applied only within the scope of the DSR regulations and are likely to see their influence diminish after the regulatory tightening in 2026.

Personalized Financial Institution Recommendation Guide Based on Individual Income and Repayment Capacity

High-income self-employed individuals may be in an advantageous position to find financial institutions that offer up to 70% LTV, as their relatively stable cash flow and high repayment capacity relative to collateral value are recognized. On the other hand, even stable salaried employees may see their mortgage loan limits significantly reduced to meet DSR regulations if their matoong balance is large. Therefore, individuals must objectively assess their income level, expected repayment capacity, and current assets before meticulously comparing the product portfolios and customer management policies of various financial institutions to select the optimal one. For example, if the burden of interest rate volatility is high, banks offering fixed-rate products with low interest rate fluctuations may be preferable, while internet-only banks' products might be worth exploring if interest rate competitiveness is the top priority.

When choosing a financial institution, one should comprehensively consider not only interest rates and limits but also early repayment fees, the feasibility of preferential conditions, and customer consultation services. It is crucial to find a financial institution that offers personalized products matching an individual's financial situation and goals. For instance, if there is a plan to sell the house within 3-5 years, opting for a product with low early repayment fees is advisable, while for long-term stable housing plans, prioritizing products with high interest rate stability would be prudent.

Smart Mortgage Loan Utilization Strategies to Prepare for 2026 Regulations

Managing Interest Burden on Variable Rate Mortgage Loans During Rising Interest Rate Periods

Mortgage loan interest rates, which hit historic lows during the COVID-19 pandemic, have risen significantly due to the sustained trend of interest rate hikes. Borrowers currently using variable rate mortgage loans are exposed to the risk of a sharp increase in interest burden if interest rates rise further. To prepare for this, it is essential to closely monitor interest rate trends periodically and plan savings or additional repayments by calculating the expected increase in interest burden. Additionally, strategies to reduce the volatility of interest burden, such as converting from variable rates to fixed rates with lower interest rate increase risk, or opting for products with an interest rate cap that limits the interest burden to a certain level, are also useful. Some financial institutions offer programs that allow for a grace period on interest payments for a certain period to alleviate the burden during times of rising rates.

Borrowers must be cautious in selecting the interest rate method that suits them best. If market interest rates are expected to decline, variable rates may be advantageous, but if interest rates are likely to rise, fixed-rate or hybrid-rate products may be a safer choice. Decisions should be made carefully, referencing financial institutions' interest rate outlook reports and conducting independent analysis.

Maximizing Loan Limits Through Proof of Credit Score and Repayment Capacity

Independent of the DSR regulation tightening in 2026, consistently managing one's credit score is paramount to securing the maximum possible mortgage loan amount. It is necessary to make financial transactions faithfully without delays and to reduce excessive debt ratios. Furthermore, clearly and systematically preparing income verification documents and reliably explaining one's repayment capacity and concrete repayment plan during consultations with financial institutions is crucial. These efforts play a decisive role in receiving positive evaluations from financial institutions and securing preferential interest rates or additional loan limits. Banks highly value data that proves a borrower's 'repayment capacity and credibility,' which directly influences loan limits and interest rate conditions.

It is necessary to regularly check one's credit score and identify and improve factors that could negatively affect the evaluation (e.g., excessive credit card use, frequent short-term loans). Diligent financial management serves as the foundation for obtaining better terms when utilizing financial products.