Office worker Yoon, a person surnamed Yoon (36), whose apartment closing date is on the 13th, asked the seller on the 9th, "Please push back the apartment closing date by a few days." Yoon planned to borrow 400 million won from the main bank, KB Kookmin Bank, next week to pay the balance, but the plan fell apart because KB Kookmin Bank cut the mortgage loan limit from 600 million won to 300 million won starting that day. Yoon said, "For now, I took annual leave at work until next Monday. I have to go around several banks to somehow get a loan, so I feel completely at a loss."
According to the financial sector on the 10th, KB Kookmin Bank from that day limited the mortgage loan limit for funds to purchase dwellings nationwide, including the greater Seoul area and regulated area, from the previous 600 million won to 300 million won.
Major banks are facing a strong demand from the financial authorities for tighter lending curbs. As of the 8th, the outstanding loan balance of the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) for household loans was 775.9563 trillion won, up 995.5 billion won from 774.9608 trillion won at the end of last month in about a week.
Borrowers who planned to take out mortgage loans exceeding 300 million won at KB Kookmin Bank are now in a bind. They are looking into loans from other banks, but that also does not appear easy. Hana Bank and NH Nonghyup Bank recently temporarily suspended new subscriptions to mortgage credit insurance (MCI) and mortgage credit guarantees (MCG). Shinhan Bank also indefinitely suspended new MCI and MCG subscriptions from that day and decided not to accept any mortgage loan applications this month.
MCI and MCG are guarantee-type insurance policies that are taken out together when obtaining a mortgage loan. Without this insurance, borrowers can only take out loans for the amount excluding small jeonse deposits, reducing the loan limit. For Seoul apartments, the limit falls by up to 55 million won, and for Gyeonggi Province apartments, by about 48 million won.
Stronger lending curbs could follow. At a household debt review meeting the previous day attended by the financial authorities and major bank officials, the authorities were said to have noted that "additional household loan regulations could come out."
According to the Korea Real Estate Board (REB) real estate statistics information system, apartment sales transactions have continued to increase, from 45,483 in February to 56,604 in March, 53,177 in April, and 51,585 in May. Given that it typically takes two to three months from signing a sales contract to a balance loan, loan demand is expected to continue at least through August.