A loan advertisement posted at a bank branch in Seoul. [Yonhap]
A loan advertisement posted at a bank branch in Seoul. [Yonhap]

Tighter loan management across the financial sector pushed new household lending to its lowest level since the first quarter of 2023, with the average new mortgage loan per borrower falling 21.1 million won ($15,300) from the previous quarter — the steepest single-quarter drop on record. New lending is expected to rebound in the third quarter as the Aug. 13 policy package loosens overall household loan caps.

The Bank of Korea's household debt statistics by borrower, released Tuesday, showed the average new household loan per borrower at 34.14 million won in the second quarter, down 1.28 million won from the first quarter. That is the lowest reading in 13 quarters, since the first quarter of 2023 (33.44 million won).

New household lending had fallen 4.09 million won in the fourth quarter of last year under the weight of real estate regulations, then edged up 990,000 won in the first quarter of this year as housing transactions picked up, before declining again in the second quarter.

By sector, bank lending rose 3.42 million won, while non-bank lending fell 14.39 million won, driven mainly by a drop in mortgage loans.

The average new mortgage loan per borrower came to 208.29 million won, down 21.1 million won from the previous quarter — the largest decline since the Bank of Korea began compiling the data in 2013. The second-quarter figure was also the lowest since the fourth quarter of 2024 (206.48 million won), marking an 18-month low.

By age group, borrowers in their 40s saw the sharpest decline, with new mortgage loans falling 35.37 million won, followed by those in their 30s (down 26.32 million won), 50s (down 12.81 million won) and 60s (down 1.69 million won). Borrowers in their 20s were the only group to see an increase, with new mortgage lending rising 3.92 million won. Their average new mortgage loan reached 232.17 million won, setting a new all-time high for the second consecutive quarter.

Borrowers in their 30s accounted for 43.7 percent of new mortgage loans, up from 41.4 percent the previous quarter. They were followed by those in their 40s (24.5 percent), 50s (15.9 percent), 60s and older (9.9 percent) and 20s (6 percent).

By region, new mortgage lending fell sharply in the Greater Seoul metropolitan area (down 43.97 million won) and the Gangwon-Jeju region (down 21.08 million won). Declines were also recorded in the southeastern region (down 9.42 million won) and the Chungcheong region (down 5.08 million won). The Honam region (up 11.13 million won) and the Daegyeong region (up 1 million won) bucked the trend.

Min Suk-hong, head of the Bank of Korea's household debt microstatistics team, said the drop in new lending per borrower reflected tighter loan management across the financial sector, including caps on total household lending. "In particular, the reduction in loan top-ups and refinancing by existing borrowers had a significant impact," she said. She added that new borrowers entering the market in the second quarter saw a slight increase in new lending, as housing transactions in the Greater Seoul area continued to rise.

Min said new lending in the third quarter could increase as the Aug. 13 policy package raised overall household loan limits. "However, the authorities' broader stance of tightening household loan management is set to continue, and conditions in the Greater Seoul housing market, the direction of government policy, and flows of share investment funds all remain to be seen," she said.

She explained that borrowers in their 20s were less affected by lending restrictions because a high proportion of them are first-time homebuyers taking out their first-ever mortgage loans.

The average outstanding household loan balance per borrower — as distinct from new lending — rose 500,000 won from the previous quarter to 97.9 million won in the second quarter.

The average outstanding mortgage balance rose 1.87 million won to 161.93 million won. Both the overall household loan balance and the mortgage balance have set new records every quarter.

Outstanding mortgage balances grew most among borrowers in their 20s (up 5.75 million won) and 30s (up 4.09 million won), and in the Chungcheong region (up 1.82 million won), the Gangwon-Jeju region (up 1.66 million won) and the Greater Seoul metropolitan area (up 1.58 million won).

By age group, borrowers in their 30s carried the highest average outstanding mortgage balance at 234.19 million won, followed by those in their 20s (203.94 million won) and 40s (185.86 million won). It is the first time the average outstanding mortgage balance for borrowers in their 20s has exceeded 200 million won.


kimstar@heraldcorp.com