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Average mortgage balance in Seoul increasing for borrowers in their 40s or younger

Published: 24 Nov. 2025, 17:15 Updated: 24 Nov. 2025, 17:44

Apartment complexes in Seoul are seen from a mountain in Gwangju, Gyeonggi, on Oct. 15. [YONHAP]

The pace of housing mortgage loans in Seoul is increasing among borrowers in their 40s or younger.

The average mortgage balance in Seoul at the end of the second quarter this year was up 11.5 percent compared to the same period last year, according to the Korea Institute of Finance on Sunday. In contrast, the increase in Gyeonggi, Incheon and other regions ranged from 5.2 to 6.5 percent.

Seoul's upward trend was largely driven by a sharp rise in the average loan amount per new borrower, particularly among those in their 40s and younger. From the fourth quarter of last year through the first half of this year, the average loan taken out by Seoul residents under 50 increased by 80 million won ($54,190). Among borrowers in their 50s and older, the average increase was just 10 million won. Many of these borrowers took out the maximum amount of loans possible.

During the same period, the average mortgage for new borrowers under 50 was 360 million won in northern Seoul and 390 million won in the southern districts, with Gangnam slightly higher.

The average debt service ratio among new borrowers in their 40s and younger was similar across regions at 28.6 percent in northern Seoul and 26.9 percent in southern Seoul.

“Given that the average annual income of Gangnam borrowers is 8.46 million won higher than that of those in northern Seoul, it is likely that borrowers took out as much as their income and the loan-to-value cap would allow,” said Kim Hyun-yeol, a research fellow at the Korea Institute of Finance.

However, this regional concentration may ease somewhat following the government’s mortgage restrictions announced on June 27 and Oct. 15, which imposed loan caps in regulated areas, including Seoul. However, volatility in the rental market remains a concern.

“Between July and September, rental prices — including monthly and semimonthly rents — in Gangnam increased at a higher rate than in other regions,” Kim added. “If younger buyers continue to prefer Seoul, regional disparities in the rental market may widen.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YU-MI [[email protected]]