Re-enactment of ‘Real Estate Youngkkeul’? Judamdae increased by 5 trillion in a month… Highest in 3 years – Money Today

The balance of home mortgage loans at the five major banks surged by nearly 5 trillion won in November. It is the first time in three years since November 2020 that mortgage loans have increased by more than 4 trillion won. As home mortgage loans rapidly increased, the size of household loans also increased by more than 4 trillion won. This can be attributed to the increase in real estate transaction volume in the third quarter of this year. According to the financial sector on the 1st, the household loan balance of the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) as of the end of November was KRW 690.3856 trillion, an increase of KRW 4.3737 trillion from the end of October (KRW 686.119 trillion). It has been 2 years and 7 months since April 2021 (6.84 trillion won) that the household loan balance of the five major banks increased by more than 4 trillion won. The household loan balance, which had been on the decline last year, turned to an increase starting in May of this year and rose to the 690 trillion won range in 11 months since December of last year.

The increase in the number of mortgages was steep. The balance of the mortgage loan amounted to KRW 526.2223 trillion, a sharp increase of KRW 4.9959 trillion from the previous month (KRW 521.2264 trillion). It is the first time in three years since November 2020, when the ‘real estate scam’ craze was in full swing, that the mortgage loan increased by more than 4 trillion won.

The increase in the mortgage balance is interpreted as the fact that real estate transaction volume reached its peak in the third quarter of this year (July-September). The volume of apartment sales in Seoul began to increase from less than 1,000 per month at the end of last year, reaching 3,589 in July, 3,860 in August, and 3,376 in September. The 3,860 cases recorded in August this year are the highest since August 2021 (4,064 cases).

Banking industry officials explain that since it usually takes about three months to pay the balance and move in after a real estate contract, new mortgage loans in November are often sales contracts made around July to September. In particular, it is interpreted that the demand for loans during the moving season has increased and the implementation of group loans has increased.

An official from the banking sector said, “The balance of policy products such as Bogeumjari Loan and Support Loan was treated as a bank account due to depletion of funds, and the balance increased. The increase in the handling of group loans in some regions also appears to have had a significant impact.”

The credit loan balance decreased by 223.3 billion won to 107.7191 trillion won compared to the previous month (107.9424 trillion won). Last October (601.5 billion won), it increased for the first time in 1 year and 11 months, but then turned to decline again. It is interpreted that borrowers are beginning to repay as high interest rates in the low 6% range continue.

The financial authorities are ordering major financial holding companies to lower lending interest rates for the sake of ‘win-win finance’, and as bank bond interest rates are slowing down, mainly for long-term bonds, lending interest rates are falling, so household debt is not expected to be eased easily. In fact, the fixed loan interest rates of the five major banks on this day were 3.82 to 5.97%, down 0.42 percentage points (p) and 0.57 percentage points at the top and bottom, respectively, compared to the 1st of last month (4.39 to 6.39%).

However, as apartment prices across the country have recently declined for the first time in 23 weeks, there is some opinion that the increase in mortgage loans may decrease. In fact, Seoul apartment sales transaction volume is also showing a decline in the fourth quarter, with 2,313 transactions in October and 1,090 transactions in November (still being counted).

The banking sector is also raising the threshold to control the speed of household lending. Starting this month, Shinhan Bank has strengthened its standards for handling home loans and jeonse loans, including limiting the limit of living stabilization funds for multiple homeowners to a maximum of 200 million won. Starting from the 24th of last month, Woori Bank also began controlling household loans by blocking subscription to mortgage insurance (MCI/MCG) and reducing loan limits.

The financial authorities have also begun to reduce household loans by collaborating with the banking sector and deciding to waive early repayment fees for household loans for the month of December. Refinance loans are excluded from the early repayment fee exemption, but this fee exemption is aimed at reducing household loan balances and will only benefit early repayment. Korea Housing Finance Corporation (Korea Housing Finance Corporation), a policy financial institution, also decided to exempt early repayment fees until the end of January next year in case of early repayment of Bogeumjari loan.

[저작권자 @머니투데이, 무단전재 및 재배포 금지]