Allocation of New Lending Capacity Wraps Up... Mortgage and Credit Portfolios Estimated at 20 Percent Range

Discussions on the allocation across the financial sector for the 30 trillion won in new lending capacity secured by doubling this year's household debt total growth rate target have virtually concluded.

With a significant portion of these funds allocated for targeted support toward real-demand borrowers such as housing supply, young adults, and mid-to-low-credit individuals, the scale available for general mortgage loans and credit loans is estimated to be in the 20 percent range of the total.

Financial institutions are currently in the final stages of fine-tuning details.

Allocation work for the secondary financial sector will also be completed early next week.

The new supply capacity for mortgage and credit loans across the entire financial sector is estimated to be around 6 trillion to 8 trillion won out of the 30 trillion won.

Considering the loan handling shares of each sector—including banks, mutual finance companies, insurers, savings banks, and specialized credit finance companies—the banking sector's supply volume is expected to be the largest.

Group loans directly tied to housing supply, such as relocation funds, intermediate payments, and balance loans, are managed as policy-reserved portions excluded from each institution's total volume regulations, and are expected to account for a significant portion of the increase.

Financial companies can handle group loans even if they have already exceeded their annual targets for this year.

In fact, the five major commercial banks have expanded their balance loan limits for "DH Bangbae," and institutions such as Saemaul Geumgo, credit cooperatives, and National Agricultural Cooperative Federation, whose net growth targets for this year were set at 0 percent, are also expected to breathe a sigh of relief by resuming group loans this week.

The proportion of mid-rate loans targeting mid-to-low-credit borrowers that are excluded from total volume management will also be expanded.

Banks will be recognized for up to 70 percent compared to the previous 30 percent, while the secondary financial sector will be entirely excluded.

The expected increase in youth-specialized jeonse loan guarantees starting in October will also be included in the policy-reserved portion.

Financial authorities plan to expand the eligibility for youth-specialized jeonse loan guarantees to those aged 39 and under, and provide guarantees of up to 300 million won for newlyweds and households with children.

Financial authorities plan to closely monitor on-site conditions by intensively tracking the status of group loans actually handled in August and September.

This is to manage household loan supply and demand by examining the actual execution process, as the new lending capacity was calculated based on move-in volumes and redevelopment plans for the second half of this year.

Some in the financial sector point out that the supply of general mortgage and credit loans could be more limited than expected.

However, considering the possibility of an additional interest rate hike by the Bank of Korea and the dampened "debt-financed investment" demand, loan demand in the second half of the year may be more suppressed than in the first half.

Although mortgage rates at some banks have recently declined, the upper end of interest rates remains high at the 7 percent range.

Financial authorities believe that household debt management will be sufficient within the newly secured lending capacity.

Therefore, the possibility of additionally adjusting this year's 3 percent household debt total growth rate target is not high.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.