In July 2025, the outstanding balance of household loans across all financial sectors increased KRW2.2 trillion (preliminary), rising at a significantly slower pace compared with the previous month (up KRW6.5 trillion), with the volume of growth falling to the lowest level since March this year.

(By Type)  Home-backed mortgage loans increased KRW4.1 trillion, growing at a slower pace compared with the previous month (up KRW6.1 trillion). Banks (up KRW5.1 trillion → up KRW3.4 trillion) and nonbanks (up KRW1.1 trillion → up KRW0.7 trillion) both saw the pace of growth decelerating.

Other types of loans decreased KRW1.9 trillion, edging back lower from the growth of KRW0.3 trillion in the previous month as credit loans, which has shown an upward movement recently, turned back lower (up KRW0.7 trillion → down KRW1.1 trillion).

(By Sector)  In July, household loans in the banking sector rose KRW2.8 trillion, which has fallen significantly from the growth of KRW6.2 trillion a month ago. Banks’ own mortgage loan products (up KRW3.8 trillion → up KRW2.2 trillion) and policy-based loans (up KRW1.3 trillion → up KRW1.2 trillion) both expanded at slower paces. Other types of loans (up KRW1.1 trillion → down KRW0.6 trillion) in the banking sector turned back lower from the growth a month ago.

In the nonbanking sector, household loans went down KRW0.6 trillion, shifting back down from the growth of KRW0.3 trillion in the previous month. Mutual finance businesses (up KRW1.2 trillion → up KRW0.3 trillion) saw the pace of growth slowing, while savings banks (down KRW0.04 trillion → down KRW0.3 trillion) and insurance companies (down KRW0.3 trillion → down KRW0.4 trillion) saw the pace of decline expanding. Specialized credit finance businesses (down KRW0.6 trillion → down KRW0.2 trillion) saw the pace of decline decelerating from the previous month.

(Assessment)  Household loans in July this year grew at a notably slower pace both on-month and on-year basis due to the effects of the strengthened household debt management measures (June 27) and the implementation of the third-stage stressed debt service ratio (DSR) rules (July 1).

Despite concerns over a potential rise in jeonse prices as a consequence of the strengthened household debt management measures, authorities viewed that there are no significant price changes in the market and that there are no signs of market anxiety, although it is necessary to continue to closely monitor trends in housing prices with seasonal demands in the second half.

In this regard, the government and related authorities plan to continue to closely monitor trends in mortgage lending activities and housing transactions across different regions, while ensuring strict responses against illegitimate and abnormal transaction activities in the housing market to effectively prevent housing market overheating and control household debt growth.

Meanwhile, the government will be prepared to immediately employ additional measures when it becomes necessary, such as enhanced loan-to-value (LTV) rules and macroprudential regulations, to make sure a sustained stabilization in household loan growth.

In the process of managing their revised down household loan target volumes, financial companies should work to make sure that there is no sharp decline in funding supply available for lower income households and non-speculative homebuyers.

* Please refer to the attached PDF for details.