"We're Playing 'Squid Game' Among Ourselves"... Intensified First-Come, First-Served Race for Group Loans and Internet Bank Mortgages

DH Bangbae Allocated 300 Billion Won in Balance Loans; Woori and Nonghyup Still Reviewing
This Month Alone Sees Over 14,000 New Move-Ins; Urgent Need for Measures
KakaoBank Mortgages Also Face a 'First-Come, First-Served Rush,' Closing Within 10 Minutes

As major commercial banks reinforce their management of total household lending, loan eligibility requirements have tightened, leading to intensified first-come, first-served competition for group loans and internet-only banks' mortgage loans. Despite financial authorities working on measures for genuine homebuyers, anxiety is growing among prospective homeowners who fear they may not secure loans before moving in.

According to the financial sector on August 11, KB Kookmin Bank, Shinhan Bank, and Hana Bank have each allocated 100 billion won for balance loans for the DH Bangbae complex in Seocho-gu, Seoul, which is scheduled for occupancy on September 1. This totals 300 billion won. Woori Bank and NH Nonghyup Bank are currently considering whether to provide group loans and at what limits. Should these banks allocate a similar scale, the entire balance loan offering could reach approximately 500 billion won.

However, concerns have arisen that this will be insufficient, as the DH Bangbae's pre-sale price for the standard 84-square-meter unit is 2.24 billion won, while actual asking prices exceed 3.5 billion won. Banks intend to apply either 50% of the appraisal value at the time of occupancy or a loan-to-value (LTV) ratio of 60% based on the pre-sale price, making a first-come, first-served loan 'open run' inevitable for future residents.

On August 7, when Shinhan Bank began accepting balance loan applications on a first-come, first-served basis, prospective residents of DH Bangbae shared messages in group chat rooms such as, "Blaming my fingers, I practiced texting with my college-aged daughter to loan officers," and, "The banks should be playing a chicken game, but we're playing Squid Game among ourselves." Some loan brokers announced they would only send information messages to those who had left their contact information during the apartment pre-inspection, prompting backlash among would-be residents.

DH Bangbae Model House. Photo by Yonhap News

The first-come, first-served rush for balance loans is expected to continue until the financial authorities announce new measures for real end-users. According to industry sources including Korea Real Estate Board, Real Estate R114, and Zigbang, the number of homes scheduled for occupancy this year, excluding rental housing, is 71,000 units, with 14,342 units scheduled for occupancy just in August.

A bank representative commented, "We fully understand that balance loans for customers about to move in are urgent," but added, "It is difficult to proactively expand loan limits before financial authorities release their measures."

Even if financial authorities ultimately exclude group loans for genuine homebuyers from the total household loan calculation, banks are still maintaining strict overall household lending caps for other mortgage loans, increasing concerns that a 'loan cliff' could persist. The total increase in household loans at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) stood at 6.3821 trillion won as of the end of last month, already surpassing the annual growth target of 4.3363 trillion won submitted to financial regulators for the year.

This has already created a 'balloon effect,' with mortgage demand shifting to internet-only banks. At KakaoBank, where the number of mortgage loans is predetermined, applications now close within just 10 minutes of opening at 6 a.m. Recent posts on online real estate forums indicate that users prepare by pre-entering information and even checking their internet speed before loan applications start.

A KakaoBank official stated, "Despite not reducing the number of loans provided compared to before, the recent surge in demand has led to this open run phenomenon."

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