Trend in household loan balances per borrower in South Korea. Data from Bank of Korea. Apartment buildings in Seoul, where rising home prices have fueled mortgage borrowing. Graphic by Asia Today and translated by UPI
Feb. 24 (Asia Today) — Average household debt per borrower in South Korea rose to a record 97.39 million won ($73,000) at the end of last year, as mortgage lending expanded amid rising home prices, according to data released Monday by the Bank of Korea.
The figure marked the first time per-borrower debt has exceeded 97 million won, up 2.24 million won ($1,680) from a year earlier. Total household loan balances reached about 1,853 trillion won ($1.39 trillion), an increase of 51 trillion won ($38.3 billion) from the previous year.
The central bank said the average rose as overall loan balances increased while the number of borrowers declined slightly, pointing to a growing concentration of debt.
Mortgage loans accounted for much of the increase, particularly among borrowers in their 20s to 40s. The average mortgage balance for borrowers in their 30s climbed to 225.41 million won ($169,000), the highest among age groups.
Loans were concentrated in the Seoul metropolitan area, where home prices continued to rise. According to the Korea Real Estate Board, apartment prices in Seoul increased 13.5% last year, the steepest gain since 2021.
Despite a slowdown in new lending following the government’s Oct. 15 real estate measures, authorities are moving to tighten controls further as household debt approaches 2,000 trillion won ($1.5 trillion), a level widely viewed as a risk to economic stability.
The Financial Services Commission has said it will set a lower annual loan growth target than last year’s 1.8% and is considering imposing separate caps on mortgage lending, the core component of total loan management.
Regulators are also reviewing a plan to raise risk-weighted asset ratios on mortgage loans from 20% to 25%, a move that would effectively make banks more cautious in extending housing credit.
Major commercial banks have already begun reducing household loan balances in line with regulatory guidance. As of Sunday, the combined household loan balance of the five largest banks stood at 765.6 trillion won ($574 billion), down about 200 billion won ($150 million) from the end of January.
— Reported by Asia Today; translated by UPI
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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260224010007193