According to the financial sector on June 11, NH Nonghyup Bank will temporarily limit enrollment in the Mortgage Credit Guarantee (MCG) starting June 12.
The MCG allows borrowers to receive full loans up to the Loan-to-Value (LTV) limit without deducting small rental deposits from their mortgage. Without this insurance, borrowers can only receive loans based on the amount after deducting the rental deposit, effectively reducing the loan limit.
With this new restriction, all mortgage insurance enrollments at NH Nonghyup Bank will be limited. Previously, the bank had suspended MCG enrollment for non-metropolitan area mortgages starting May 20. On June 6, it had already imposed temporary restrictions on MCG enrollment for mortgages in the metropolitan area (Seoul, Gyeonggi, Incheon), expanding the regulations to non-metropolitan areas.
Additionally, NH Nonghyup Bank has restricted in-person applications for some variable-rate mortgage products since June 1 and reduced the maximum loan term for non-metropolitan area mortgages from 40 years to 30 years. The interest rates for fixed-rate and 6-month variable-rate mortgages have also been increased by 0.2 percentage points.
A bank official stated, "This is a measure to strengthen support for genuine borrowers."
Meanwhile, household loans in the banking sector are rapidly increasing, particularly in the areas of mortgages and credit loans.
According to the Financial Services Commission's report on 'May Financial Market Trends,' the balance of household loans from deposit banks reached 1,181.8 trillion won at the end of May, an increase of 6.9 trillion won from the previous month. This marks the largest increase in 1 year and 9 months since August 2024 (+9.2 trillion won).
By loan type, the balance of mortgage loans rose by 3.2 trillion won to 940.8 trillion won, while other loans, including credit loans, surged by 3.7 trillion won to 240.2 trillion won.
* This article has been translated by AI.
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