The Financial Services Commission will tighten income screening for real estate loans by adjusting the rate at which bonuses are reflected when calculating the debt service ratio (DSR). It will extend the borrower's income assessment period to three years so that one-off large bonuses are not reflected in the DSR. If so, employees who receive large bonuses, such as Samsung Electronics(005930) and SK hynix(000660), are expected to see their loan limit reduced.
The Financial Services Commission (FSC) on the 15th briefed President Lee Jae-myung at the Blue House State Guest House on these measures. Under the current rules, even when this year's income rises more than 30% from the previous year due to bonuses, the full amount is not reflected in the DSR calculation; instead, the average of this year's and last year's income is used. The FSC is reviewing a plan to extend the averaging period to three years.
If the averaging period is extended to three years, the portion of bonus increases reflected in DSR-calculated income will shrink, reducing the loan limit.
Samsung Electronics and SK hynix recently paid employees bonuses totaling tens of trillions of won on the back of a boom in the semiconductor market. As concerns grow that the related funds could flow into the real estate market and fuel home price increases in the Seoul metropolitan area, the move is seen as taking that into account.
The Financial Services Commission (FSC) said it will maintain its stance on managing the total volume of household liabilities in the second half. This year's management target is set at an increase of 1.5% from the end of last year. That is tighter than last year's actual 1.7%. To manage household liabilities, it plans to curb financial companies' incentives to issue mortgage loans by requiring additional capital for high-risk mortgage loans.
KB Kookmin Bank, starting on the 10th, sharply lowered the loan limit for home purchase funds from 600 million won to 300 million won. This appears to be a measure to meet the total household loan volume agreed with the financial authorities. However, the Financial Services Commission (FSC) does not expect other banks to reduce their loan limit to the same level as Kookmin Bank.