The maximum limit for household mortgage loans has been set at 600 million won due to the impact of the June 27 household loan measure, leading to a nearly halving of application amounts for mortgage loans from banks.
According to the financial sector on the 6th, the average daily application amount for mortgage loans in the Seoul area from last month 30th to this month 3rd, following the announcement of the June 27 measures, was recorded at about 350 billion won. This is more than halved compared to the average application amount of about 740 billion won in the week preceding the loan regulation announcement from June 23 to 27.
The application amounts for mortgage loans serve as an indicator to gauge market sentiment because there is not much lag time between the point of housing sales contracts and loan applications. In contrast, loan executions have a delay of 1 to 3 months after housing sales. For this reason, the total amount of household loans is not expected to decrease immediately in July. This is because applications for mortgage loans were concentrated in the first half of the year in preparation for the three-tiered Total Debt Service Ratio, which is set to be implemented starting in July.