Starting on the 17th of this month, extensions of maturity on apartment collateral loans held by multiple-home owners in the greater Seoul area and regulated zones will be banned. Borrowers found to have diverted funds for nonintended purposes, such as purchasing dwellings with business loans, will be barred from taking out new household loans at all financial institutions for up to 10 years.
The Financial Services Commission on Apr. 1 held a joint "household debt review meeting" with related ministries at Government Complex Seoul and announced the 2026 household debt management plan.
Financial Services Commission Chair Lee Eog-weon, who presided over the meeting, said, "To shed the disgrace of being a 'real estate republic that ruins a nation,' it is urgent to decisively sever ties between the real estate market and finance," adding, "The household debt management plan announced today will be a starting point for finance to lead 'a great transition of our economy' by decoupling from the real estate market."
According to the plan announced that day, in principle, maturity extensions on apartment collateral loans held by multiple-home owners in the greater Seoul area and regulated zones will be prohibited. The standard for multiple-home owners is individuals or rental business operators who own two or more dwellings regardless of location. When determining multiple-home status, dwellings with signed sales contracts, daycare centers, and dwellings that remain unsold after completion, among cases where applying regulations is difficult, will be excluded from the dwelling count.
Exceptions will allow maturity extensions when reasons are recognized that make it difficult to sell a dwelling immediately, such as when there is a tenant. If a person without a home purchases a multiple-home owner's dwelling that has a tenant, the obligation to reside will be deferred until one month after the lease expires. However, only dwellings with less than four months remaining on the lease may be subject to transaction.
The financial authorities will also check whether business loans executed since 2021 were diverted for nonintended purposes. If diversion is detected, the loan will be immediately recalled and reported to investigative agencies. If diversion is detected once, the borrower will be barred from new household loans across the entire financial sector for three years, and for 10 years if detected twice.
The financial authorities set this year's household loans growth rate at 1.5%, lower than last year's 1.7%. Through a mid- to long-term roadmap, the ratio of household debt to gross domestic product (GDP) will be brought down and stabilized to around 80% by 2030. Last year's ratio of household loans to GDP is estimated at 88.6%.
The share of real estate policy loans will be gradually reduced from the current level of around 30% to around 20%. For the Korean Federation of Community Credit Cooperatives (KFCC), which exceeded last year's household loans target, net increases in household loans will be limited this year.
Regulations on mortgage loans by online investment-linked finance providers will also be strengthened. Currently, under self-regulation, the loan limit for mortgage loans is capped at 600 million won, but other regulations such as the loan-to-value ratio (LTV) are not applied. Starting on the 2nd, the online investment industry will be subject to the same LTV regulations and loan limit as the financial sector.
A separate management target for mortgage loan will be established to manage the monthly increase in financial companies' household loans. By setting monthly and quarterly management targets, concerns raised every year about a year-end credit crunch will also be eased.