Financial Authorities Lower Annual Household Loan Growth Target to 1.5%

Financial authorities have tightened restrictions, aiming to limit this year's banking sector household loan growth to just 1.5% compared to the previous year. However, as the increase among the five major banks has already surpassed this target, a dispute has broken out between the government and the opposition party over countermeasures.

As of the 6th, the outstanding household loans of the five major banks stood at 650.3766 trillion won, an increase of 5.4005 trillion won this year. This figure already exceeds the annual target of 4.33 trillion won.

As loan limits are exhausted, cases are occurring where homebuyers are forced to cancel signed purchase contracts because they cannot secure financing. KB Kookmin Bank reduced its mortgage limit from 600 million won to 300 million won starting on the 10th of last month. Other banks are also setting loan limits by branch to manage the total volume of household loans, with some branches exhausting their limits earlier this month. KakaoBank's mortgage loans are exhausting their daily limits within 10 minutes of applications opening at 6 a.m. every day.

Park Sung-hoon, chief spokesperson for the People Power Party, criticized the total household loan regulation in a commentary on the 12th, stating it has reduced the capitalist financial market to a "first-come, first-served distribution center." The government is considering exception measures for actual buyers who are unable to receive loans due to these regulations.