Lenders forced to further limit household loan growth, not to extend loans to owners of multiple homes

All local lenders in Korea will be forced to further tighten their household lending this year and not extend loans to owners of multiple homes, the financial regulator said Wednesday, in a stepped-up move to rein in record household debts. Banks, insurers and other lending institutions will be asked to keep their annual aggregate household loan growth at under 1.5 percent this year, down from the previous year's 1.7 percent gain, according to the Financial Services Commission (FSC). Every year, banks are advised to set their loan growth at certain levels to prevent a sharp rise in household debts. With the measure, the ratio of household debt to the gross domestic product will be reduced to between 87 percent and 87.5 percent this year, down from 89.6 percent in 2024 and 88.8 percent in 2025, according to the regulator. The FSC said all financial institutions will also be required to tighten their grip on mortgage loans, a key source for ballooning household debts. The latest measures will also center on owners of multiple homes with their mortgage loans not to be further extended. Owners

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