Mortgage Loans at Top 5 Banks See Largest Increase in 11 Months... Credit Loans and Overdraft Accounts Also Surge on "Bargain Buying"

Household Loan Growth Far Exceeds Annual Target
Demand Deposits Plunge by a Record 52 Trillion Won

Despite comprehensive lending restrictions imposed by financial authorities and the banking sector, household loans continue to rise as demand for "bargain buying" driven by the recent plunge in stock prices remains strong, and Seoul apartment prices continue to climb. The increase in household loans at major commercial banks has already surpassed the annual management target set by the financial authorities by more than 1 trillion won, putting total loan management on high alert.

An image of commercial bank ATMs installed throughout Seoul city. Photo by Yonhap News.

According to the financial sector on August 2, the outstanding balance of household loans at the five major commercial banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—stood at 778.7869 trillion won as of July 30, an increase of 3.8261 trillion won from the previous month. In particular, both mortgage loans and unsecured credit loans surged. The outstanding balance of mortgage loans reached 617.4287 trillion won, up by 2.2831 trillion won within a single month, marking the largest monthly increase in 11 months since August 2025 (+3.7012 trillion won). This increase is attributed to sustained demand from both end-users and gap investors as housing prices in Seoul remain on the rise.

Unsecured credit loans also rose significantly amid market volatility. The outstanding balance of personal credit loans climbed to 110.0484 trillion won, the highest level in three years and four months since March 2023. Of this amount, overdraft account (minus account) balances reached 44.4669 trillion won, the largest since August 2022. Notably, in just six days during the last week of July (25th to 30th), when the KOSPI plunged, overdraft account balances spiked by 1.7501 trillion won.

The problem is that the financial authorities’ household loan management targets have effectively been rendered meaningless. The major banks have halved their mortgage loan limits or stopped accepting applications from loan agents in an effort to tighten restrictions, but the household loan increase—excluding policy loans—at the five major banks has already exceeded the annual goal reported to the Financial Supervisory Service by more than 1 trillion won. In some cases, individual banks have already surpassed 190% of their internal loan targets, indicating that total loan caps have been completely breached.

Meanwhile, capital flows have sharply diverged in the market. Demand deposits, which are idle funds that can be mobilized at any moment, decreased by 52.4293 trillion won in a single month, marking the largest drop since records began in 2019. A significant portion of these fleeing funds appears to have flowed into the stock and real estate markets. On the other hand, as banks launched fixed deposit products offering annual interest rates in the 3% range to attract deposits, fixed deposits increased by 24.9492 trillion won, the largest monthly growth in three years and nine months.

This content was produced with the assistance of AI translation services.