Last month, the balance of home mortgage loans saw its largest increase in eight months, prompting NH Nonghyup Bank to tighten its lending criteria for household loans, particularly mortgages. This move is interpreted as a measure to strengthen total loan management amid a resurgence in mortgage growth within the banking sector.
According to financial sources on May 18, NH Nonghyup Bank will temporarily restrict refinancing for face-to-face mortgage loans from other banks starting May 20.
The bank stated that this action aims to enhance stable management of household loan volumes and to focus on lending for genuine demand.
Additionally, starting the same day, there will be temporary restrictions on face-to-face mortgage insurance (MCI) for home loans in non-metropolitan areas. However, group loan payments will be exempt from this restriction.
MCI is an insurance policy that borrowers must obtain when executing a mortgage loan. Without this insurance, financial institutions can only lend amounts excluding small rental deposits, effectively reducing the borrowing limit for the borrower. Thus, even if loans are not completely halted, the actual threshold for borrowing becomes significantly higher.
Previously, on May 6, NH Nonghyup Bank had already limited MCI subscriptions for mortgage loans in metropolitan areas.
Meanwhile, household loans in the banking sector have recently shown an upward trend, particularly in mortgages. This increase is attributed to a surge in housing transactions during the first quarter, which is now being reflected in the market ahead of the expiration of the capital gains tax exemption on May 9.
According to the Bank of Korea's financial market trends, as of the end of April, the balance of mortgage loans at deposit banks reached 937.6 trillion won, an increase of 2.7 trillion won from the previous month. This marks the largest increase since August of last year. The total balance of household loans at deposit banks also rose to 1,174.9 trillion won at the end of April, up 2.1 trillion won from the previous month, marking two consecutive months of growth.
* This article has been translated by AI.
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