Ahead of the year-end, commercial banks are suspending or scaling back jeonse loans and mortgage loans. If they exceed the total lending cap, they face the disadvantage of having the following year's cap reduced. With the financial authorities planning to maintain a hardline management stance next year as well, a "lending freeze" is expected to continue into next year.
According to the financial sector on the 21st, among the five major commercial banks, KB Kookmin Bank, Shinhan Bank, and Hana Bank have exceeded their mortgage loan targets, including jeonse financing. Kookmin Bank will restrict in-person applications for mortgage loans and jeonse loans starting on the 24th of this month, and Hana Bank starting on the 25th. Shinhan Bank is also expected to impose restrictions soon. Commercial banks have already been controlling the pace of lending since early this month by gradually raising mortgage loan rates or reducing limits.
Woori Bank and NH Nonghyup Bank also have monthly limits by branch, so whether loans are available varies by branch. Woori Bank grants a monthly limit of 1 billion won per branch.
Since the June 27 real estate measures, the financial authorities have halved banks' second-half household loan growth targets to stabilize home prices. Banks that fail to meet this year's aggregate plan will have next year's total lending limits reduced.
There are expectations in the banking sector that the lending freeze could continue into next year. The Financial Services Commission (FSC) in September raised the floor for the risk weight (RWA) on mortgage loan assets from 15% to 20%. This means the minimum amount of capital banks must hold when extending mortgage loans increases. As mortgage loans rise, it becomes harder for banks to defend their capital ratios, prompting them to tighten screening or set higher rates. The banking industry expects that as RWA is raised, annual mortgage loan supply capacity could decrease by 27 trillion won.
The financial authorities plan to begin consultations on next year's household loan supply plan as soon as management plans in the banking sector are drawn up next month. Typically, the banking sector's annual plans are finalized around February after consultations with the authorities and board approval. The authorities plan to keep next year's loan growth within the nominal GDP growth rate while checking monthly and quarterly limits.