While commercial banks are keeping the bar high for general mortgage loan and unsecured loan products, they are expanding sales of group loans.
According to the financial sector on the 23rd, Hana Bank on the 21st halted, for November executions only, new mortgage loan and jeonse loan applications submitted through loan brokers. Early this month it stopped new sign-ups for non-face-to-face mortgage loan products and also ceased new originations of variable-rate mortgage loan products, further raising the threshold for household loans.
Since last month, KB Kookmin Bank has capped collateralized loans for the purpose of purchasing dwellings at 300 million won, regardless of region. Shinhan Bank also reduced the limit for new unsecured loans to up to 100 million won within annual income, and cut the overdraft limit to 50 million won.
The pace of loan growth has also slowed. The five major banks (KB Kookmin, Shinhan, Hana, Woori, NH NongHyup) approved 5760.8 billion won in mortgage loan products from the 1st to the 20th of this month, averaging 288.0 billion won per day, down 11.6% from last month. As of the 20th, the outstanding balance of unsecured loans was 109.7462 trillion won, down 7.1 billion won from the end of the previous month.
Banks are continuing loan curbs because the increase in household loans has already exceeded the original management target. As of the 20th, the five major banks' outstanding loan balance for household loans, excluding policy loans, was 651.151 trillion won, up 6.181 trillion won from the end of last year. That surpasses the previous annual growth target of 4.3363 trillion won.
However, with the financial authorities expanding the annual growth rate target for total household loans from 1.5% to 3%, additional room has opened up. Banks are focusing this on funds related to dwellings supply, such as group loans.
Competition over balance-due loans for THE H Bangbae in Seocho District, Seoul, which is slated for move-in next month, is a prime example. The five major banks expanded the loan limit for balance-due loans for this apartment from the previous 100 billion won per bank to 200–400 billion won. The total limit jumped more than threefold from 500 billion won to 1.55 trillion won.
The rate war is also fierce. Hana Bank offered a minimum annual rate of 4.566% for the THE H Bangbae balance-due loan. Other banks also rolled out rates in the 4.6% range and are reviewing further cuts.