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Household loans fall for 1st time in 11 months amid tight lending rules

Published: 14 Jan. 2026, 17:08

Apartment complexes in Seoul are seen on Dec. 23, 2025. [YONHAP]

Household loans extended by Korean banks fell for the first time in 11 months in December amid tightened lending regulations aimed at cooling the overheated property market in the capital region, central bank data showed Wednesday.

Banks' outstanding household loans stood at 1,173.6 trillion won ($794.7 billion) as of end-December, down 2.2 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

It marks the first on-month decline since January 2025, when household loans dipped 500 billion won.

Home-backed loans fell 700 billion won on-month in December, following an 800 billion-won gain the previous month. Unsecured and other types of household loans fell 1.5 trillion won following a rise of 1.2 trillion won in November.

Under the tightened rules announced in mid-October, the government designated 21 more districts in Seoul as speculative zones, placing all 25 districts in the capital under stricter regulations. It also toughened lending limits, capping mortgage loans at as little as 200 million won.

The data also showed that corporate loans fell 8.3 trillion won on-month in December, following a 6.2 trillion-won gain the previous month.

Outstanding corporate loans stood at 1,363.9 trillion won at the end of December, the BOK said.

The data came as the central bank is widely expected to keep its policy rate unchanged at 2.5 percent this week in a bid to support the weakening currency and ease an unsettled property market.

The BOK held the key rate steady for four consecutive meetings through November, though the central bank entered an easing cycle in October 2024.

Yonhap