Hana Bank Halts Online and Variable-Rate Mortgage Loan Sales, Lowers Overdraft Account Limits (Update)

Hana Bank has suspended online mortgage loan sales as part of its effort to manage the total volume of household lending. The bank is also raising the bar for household loans by sequentially lowering overdraft account limits and suspending the offering of variable-rate mortgage loans.

Commercial banks are raising mortgage loan interest rates one after another to slow the pace of household loan growth. On the 3rd, a customer visiting a commercial bank in Euljiro, Jung-gu, Seoul is receiving consultation. Photo by Yojongjun

According to the financial sector on August 7, Hana Bank decided to halt the issuance of new online mortgage loans starting today. A Hana Bank official explained, "This is to ensure efficient management of household loans and maintain a stable financial supply focused on real demand."

Beginning August 11, the overdraft account limit will be capped at 50 million won. The existing policy, which sets the maximum credit loan limit per borrower to 100 million won, remains unchanged. From August 12, new variable-rate mortgage loans will be suspended for both online and offline channels.

The suspension of online and variable-rate mortgage loan sales is a temporary measure, but the exact date for resumption has not been set.

Previously, Hana Bank also strengthened its household loan management by limiting household credit loans to a combined total of 100 million won per borrower and temporarily halting new enrollments for mortgage loan insurance.

Other banks are also tightening restrictions on household loans to meet their annual targets for total household lending. They are reducing mortgage loan limits, temporarily suspending loan applications through broker channels, and ceasing new variable-rate mortgage loans.

These moves appear to be aimed at responding to the rapid increase in total household loans this year. As of August 2, the increase in household loans at the five major banks (excluding policy loans) has already exceeded their annual target submitted to the Financial Supervisory Service at the beginning of the year by over 1 trillion won.

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