Lee Ok-eon, chairman of South Korea’s Financial Services Commission, calls for continued mortgage support for genuine buyers despite government efforts to tighten household debt oversight, signalling cautious easing to sustain housing supply.
Lee Ok-eon, chairman of South Korea’s Financial Services Commission, has pressed lenders to keep transition, interim and final home-purchase loans flowing for genuine buyers after the government moved to tighten oversight of household debt and property finance.
At a meeting in Seoul on Friday with financial institutions and related agencies, Lee said the latest adjustment to the household lending target was meant to support end-users rather than encourage speculative borrowing. He said lenders should handle borrowers affected by the new rules with care, and should not let the wider room for credit supply become a signal for a fresh wave of risky demand.
Lee also urged banks and other financial firms to prepare for complaints and operational disruption by training staff and upgrading internal systems. He said the authorities wanted to avoid confusion in the field, where loan rules can directly affect buyers’ financing plans and the timing of home purchases.
The meeting came a day after the government unveiled a broader package for real-estate finance. Lee called on the industry to support housing supply and the normalisation of project-financing sites, while the Financial Supervisory Service said it would quickly draw up detailed measures to temporarily delay new capital-ratio rules for residential development projects and to strengthen support centres for troubled PF sites. The Korea Housing Finance Corporation, Korea Housing & Urban Guarantee Corporation and SGI Seoul Guarantee said they would expand project-finance guarantees to 23 trillion won this year and 33 trillion won next year, while also widening policy financing and guarantee support for newlywed couples and younger borrowers. The Bankers Association said it would continue efforts to ensure funding for housing supply while keeping self-regulation on credit loans in place.
Signs of tighter lending were already visible in July. According to the Financial Services Commission, household lending across the financial sector rose by 6.2 trillion won last month, down by 2.1 trillion won from June. Mortgage lending increased by 3.5 trillion won, a smaller rise than the 4.5 trillion won gain the previous month, while other loans, including credit lending, fell by 1.1 trillion won.
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