As banks move to cap the total volume of household loans, the bar is also rising for final payment loans needed at move-in for newly built apartments. Some banks are accepting loan applications on a first-come, first-served basis within a set limit, leaving prospective residents facing an emergency to secure their final payments. If they cannot obtain a final payment loan, they may be unable to move in even after paying the down payment and interim payments, or be pushed into arrears, prompting growing calls among those awaiting move-in that "loans for end users should be treated as exceptions."
According to the real estate industry on the 10th, banks have recently taken a conservative stance on mortgage loan and group loan issuance, leaving some prospective residents of newly built apartments struggling to secure final payments. A final payment loan is a group loan taken by a person who bought an apartment through pre-sale to pay the remaining balance at the time of move-in.
As the financial authorities tighten their stance on total household loans management, banks are reducing not only individual mortgage loan issuance but also the scale of group loans. Individual loan limits are not directly shrinking, but because new issuance limits are capped by bank, prospective residents must find a bank where loans are available and identify when applications open.
At a soon-to-be-occupied apartment complex in Gwangju, applications for final payment loans were recently taken under a 20 billion won cap. A loan broker at the bank said, "Given the large amount per household, the cap is likely to be filled even if we take applications from around 50 households."
A complex in Hwaseong, Gyeonggi Province, that is set for move-in at the end of this month is in a similar situation. Prospective residents said, "It is hard to understand why we are blocked at the application stage even before screening," and "Even when a group loan window opens, it closes in a few hours and there are many people on the waiting list."
At a newly built complex in Busan, the association and the council of prospective residents contacted financial firms to secure final payment loans, but many reportedly balked, citing limited remaining capacity. Prospective residents at the complex filed civil complaints with local governments.
Prospective residents said, "We understand that even the banks that handled our existing interim payment loans say it is difficult to convert to final payment loans or allocate additional limits," and argued, "People who bought apartments through pre-sale could be pushed into arrears regardless of their creditworthiness or willingness to pay the balance." They asked the Ministry of Land, Infrastructure and Transport and the financial authorities to apply exceptions to limits or grant temporary increases for newly built move-in complexes.
This is not the first time concerns have grown that move-ins could be disrupted due to a pullback in final payment loans. Ahead of move-in at Olympic Park Foreon in Gangdong District, Seoul, at the end of 2024, tightening household loans oversight by banks also sparked concerns about securing final payment loans. As worries mounted that the massive move-in of more than 12,000 households could face disruptions, major banks handled final payment loans by setting a total cap for each bank.
The real estate industry believes that tightening final payment loans under the same standards as general investment loans could significantly harm end users. An industry official said, "A final payment loan is taken at move-in after setting the pre-sale price, down payment, interim payments, and the final balance plan at the time of pre-sale," and added, "If loans are suddenly blocked, prospective residents—who cannot readily come up with hundreds of millions of won separately—are bound to be harmed."
Seo Jin-hyung, a professor in the Department of Real Estate Law at Kwangwoon University, said, "For people without homes or those seeking to live in the property for non-speculative purposes, selective supplementary measures should be considered so that final payment loans can be processed smoothly."