Two more banks stopped issuing mortgages after the financial regulator began applying pressure on financial institutions to limit lending, and borrowers with poor credit could suffer the most.
The toughest-yet loan regulations have gone into effect. The government is wielding what could be its last card to rein in runaway housing prices. But the universal strictness could dampen normal financial and real estate...
Starting January 2022, principal and interest payments on loans will be limited to 40 percent of income if total obligations exceed 200 million won. The rule will apply to debts of 100 million won or more from July 2022.
More than 40 percent of people who took out mortgages in the first quarter have unsecured loans.
A poster in front of a bank advertises loans. Mortgage loans are offered at an annual interest between 3.14 to 4.95 percent as of Monday, an increase from the 2.92 to 4.42 percent range offered at the end of August.
Legitimate borrowers with not be turned down for joense loans, according to Financial Services Commission Chairman Koh Seung-beom.
It's only going to get tougher for households to borrow from banks as the year wears on.
Loans to small and medium sized enterprises are on the rise as banks are forced to clamp down on household loans.
People walk past loan advertisements displayed on the wall of a bank in Seoul.
Borrowing money from banks has become difficult as the FSC has asked banks to tighten regulations to reduce household debt. Starting Wednesday, KB Kookmin Bank stopped issuing new mortgage credit insurance and mortgage credit guarantees.