Commercial banks are sharply cutting mortgage lending in the second half of the year… Seoul '10hundred-million-won self-capital' era
Major commercial banks have decided to sharply reduce mortgage-loan limits starting in the second half of the year. Some reports say that if mortgage limits are capped at 3hundred million won, buying a home in Seoul would require '10hundred-million-won self-capital.' Insurers are also tightening household lending, narrowing households' access to loans.
Major commercial banks have decided to sharply reduce mortgage-loan limits starting in the second half of the year. Some reports put the mortgage-loan cap at 3hundred million won, and point out that this would require '10hundred-million-won self-capital' to buy a home in Seoul.
Some banks are considering cutting existing loan limits by about half. Reports also said that tighter rules on loan brokers will restrict supply by channel.
Reports have said that, in addition to the banking sector, insurers are also reducing their handling of credit loans and policy loans. Insurance-company officials said they would tighten handling standards to manage household-loan risk.
As the tightening of lending supply spread, some nonfinancial companies also announced funding policies. Platinum T&A signed a trust agreement to buy treasury shares worth 10 billion won.
OSP said it would send a letter to shareholders after being notified of designation as a stock under management and that it would pursue capital expansion and treasury-share purchases.
With this change, if loan limits are reduced and fundraising channels are restricted, households’ access to loans could decline. A notable feature is that changes in the lending stance of the financial sector and companies’ announcements of funding measures are emerging at the same time.