Household Loans in 2025

In 2025, the outstanding balance of household loans across all financial sectors went up KRW37.6 trillion (preliminary), growing at a slower rate compared with the end of the previous year (up 2.6 percent → up 2.3 percent).

* Change (in trillion KRW, y-o-y): +107.5 (2021), -8.8 (2022), +10.1 (2023), +41.6 (2024), +37.6 (2025^P)

It demonstrates that the ratio of household debt to GDP continues to be on a downward path toward stabilization.

* Household debt to GDP ratio (%): 98.7 (2021), 97.3 (2022), 93.0 (2023), 89.6 (2024), 89.3 (Q3 2025)

(By Type)  In 2025, mortgage loans increased at a slower rate compared with the previous year (up KRW58.1 trillion → up KRW52.6 trillion). Other types of loans edged down at a slower rate over the same period (down KRW16.5 trillion → down KRW15.0 trillion).

(By Sector)  Household loans grew at a slower rate in the banking sector compared with a year ago (up KRW46.2 trillion → up KRW32.7 trillion). The nonbanking sector saw household loans shifting back up from a decline seen in the previous year (down KRW4.6 trillion → up KRW4.8 trillion).

Mortgage loans from banks rose at a slower rate compared with the previous year (up KRW52.2 trillion → up KRW32.4 trillion). Other types of loans from banks edged back up from a decline seen a year ago (down KRW6.0 trillion → up KRW0.3 trillion).

Household loans in the nonbanking sector declined in the specialized credit finance (down KRW3.0 trillion), insurance (down KRW1.8 trillion), and savings banks (down KRW0.8 trillion) sectors, but rose in the mutual finance (up KRW10.5 trillion) sector.

Household Loans in December 2025

In December 2025, the outstanding balance of household loans across all financial sectors dropped KRW1.5 trillion (preliminary), edging down from the growth of KRW4.4 trillion a month ago and of KRW2.0 trillion in the previous year.

(By Type)  In December 2025, mortgage loans from banks rose at a slower rate compared with the previous month (up KRW3.1 trillion → up KRW2.1 trillion). Other types of loans turned back down from a growth seen in the previous month (up KRW1.3 trillion → down KRW3.6 trillion).

(By Sector)  Household loans edged back lower in the banking sector from a growth seen in the previous month (up KRW2.1 trillion → down KRW2.2 trillion), but increased at a slower rate in the nonbanking sector (up KRW2.3 trillion → up KRW0.7 trillion).

Mortgage loans from banks dropped KRW0.7 trillion, shifting back lower from the growth of KRW0.8 trillion a month ago. Banks’ own mortgage loans (up KRW0.1 trillion → down KRW1.3 trillion) and policy-based mortgage loans (up KRW0.1 trillion → down KRW0.3 trillion) both edged down lower from the previous month. Other types of loans including credit loans also shifted back lower from a growth seen in the previous month (up KRW1.2 trillion → down KRW1.5 trillion).

In the nonbanking sector, household loans increased at a slower rate compared with the previous month (up KRW2.3 trillion → up KRW0.7 trillion). Mortgage loans (up KRW2.3 trillion → up KRW2.8 trillion) from nonbanks rose at a faster rate, but other types of loans (up KRW0.04 trillion → down KRW2.1 trillion) turned back lower from a growth in the previous month. Specialized credit finance businesses (down KRW0.8 trillion), savings banks (down KRW0.5 trillion), and insurance companies (down KRW0.004 trillion) saw household loans declining, while the mutual finance sector (up KRW1.9 trillion) saw an increase in household loans.

Assessment

In 2025, housing market volatility in the first half of the year and ongoing expectation for rate cuts presented challenges for household loan management. However, with the introduction of various household debt management measures including the implementation of the third-stage stressed debt service ratio (DSR) rule, authorities were able to stably manage the pace of household loan growth. Going into 2026, authorities will continue to maintain consistent policy stance on household debt management to help channel funds away from the heavily concentrated real estate market toward more productive sectors.

To this end, financial companies are advised to strictly adhere to their household loan management targets from the very onset of the year while avoiding excessive competition to make sure a stable and steady supply of loans to households throughout the year.

At today’s meeting on household debt management, the FSC introduced detailed plans for making adjustments to the housing finance rules requiring financial companies to contribute certain levels to the housing finance credit guarantee fund based on the amount of housing loans (mortgage loans and jeonse loans) issued. The applicable base rates for contribution will vary, ranging between 0.05 percent and 0.30 percent, depending on the amount of housing loans issued by individual financial companies. The updated contribution rates are expected to have the effect of discouraging financial companies from issuing high-value mortgage loans.

* Please refer to the attached PDF for details.