Regulations on Home Purchase Loans to Be Eased, While Jeonsae Deposit Loans Face Tighter Controls

Financial authorities are reviewing a plan to exempt loans for genuine end-users, such as young adults, newlyweds, and first-time homebuyers, from the aggregate household loan growth limits. The key challenge lies in establishing clear criteria for genuine end-users, such as those relocating for work, their children's education, or to care for aging parents. Currently, financial authorities cap the annual growth rate of household loans at financial institutions at around 1.5%.

Conversely, the authorities are simultaneously seeking to tighten regulations on speculative demand, such as Jeonsae loans for non-resident single-homeowners and high-value mortgages. Financial authorities are discussing measures to further lower the guarantee rate for Jeonsae loans or to restrict the guarantees altogether for non-resident single-homeowners.

Also under review is a plan to impose a macroprudential management levy of 1% to 2% of the loan amount on borrowers with high-value mortgages.