Driven by the government's Oct. 15 real estate measures, household loans in November appear to have increased by about 4 trillion won. The month-over-month increase, which had swelled by nearly 5 trillion won the previous month, narrowed, and it also narrowed from a year earlier. In addition, the Financial Services Commission (FSC) decided to apply the current two-step stress debt service ratio (DSR) to regional mortgage loan through the first half of next year.
The Financial Services Commission (FSC) held a household debt review meeting on the 10th and released November household loans trends. According to the FSC, household loans across all financial institutions in November rose 4.1 trillion won from the previous month. In particular, mortgage loan increased by 2.6 trillion won, with the growth narrowing from the previous month's 3.2 trillion won.
As year-end aggregate controls on household loans were tightened, the increase in banks' mortgage lending (2 trillion won → 700 billion won) shrank significantly. By contrast, secondary financial institutions (1.2 trillion won → 1.9 trillion won) grew. Other loans increased by 1.6 trillion won, with the month-over-month rise narrowing. Other loans include general unsecured loans, credit line loans, and time and demand deposit collateral loans, among which unsecured loans held steady at 900 billion won, similar to the previous month.
By sector, banks' household loans increased by 1.9 trillion won, with the rise narrowing sharply from 3.5 trillion won the previous month. Banks' own mortgage lending saw its increase shrink from 1.1 trillion won to 100 billion won, and policy loans from 900 billion won to 600 billion won. The growth in other loans also narrowed from 1.4 trillion won to 1.2 trillion won.
Household loans at secondary financial institutions increased by 2.3 trillion won, expanding from 1.4 trillion won the previous month. Mutual finance institutions (1.2 trillion won → 1.4 trillion won), insurance (100 billion won → 500 billion won), and specialized credit finance companies (200 billion won → 400 billion won) all saw wider increases. Savings banks saw their decline narrow from 200 billion won to 40 billion won.
The Financial Services Commission (FSC) interpreted November's household loans trends across financial institutions as the effect of strengthened household debt management measures, including the Oct. 15 package. It assessed that the narrowing increase in mortgage loan had a large impact.
Along with this, the Financial Services Commission (FSC) discussed operating plans for the stress DSR in the first half of next year. The FSC said that, considering the impact on household debt and conditions in regional real estate and construction markets, it plans to apply the same two-step stress DSR to regional mortgage loan during the first half of next year as under the current system.
Although the three-step stress DSR has been in place since Jul. 7, application to regional mortgage loan has been deferred for six months until the end of this year. Accordingly, for regional mortgage loan, lower levels than the three-step regime will apply for ▲ stress rates ▲ baseline application ratios ▲ loan-type application ratios.
The stress DSR is a system that reflects future interest rate fluctuation risks by adding a spread (stress rate) to the lending rate to calculate the loan limit. When a stress rate reflecting future interest rate volatility risk is added, it has the effect of reducing the loan limit.