Nonghyup Bank Resumes New Mortgage Applications After Two-Month Suspension
Adjustable-Rate Mortgage Loans Resume After Two Months
"Providing Financial Support Focused on Actual Demand"
NH Nonghyup Bank will resume issuing adjustable-rate mortgage loans. This move is seen as the result of the government relaxing its total household loan volume regulations this year, thereby easing restrictions on lending.
According to the financial sector on August 19, NH Nonghyup Bank plans to resume issuing its adjustable-rate mortgage loan product, "NH Mortgage Loan," starting August 20. This comes about two months after the bank restricted new loan issuance on June 1.
A representative from NH Nonghyup Bank stated, "We are resuming issuance in order to provide stable financial support centered on actual demand."
Nonghyup Bank had previously restricted subscription to mortgage insurance (MCI) for properties in the Seoul metropolitan area starting May 6, and on May 20, temporarily suspended refinancing mortgage loans from other banks. These actions were taken due to the rapid increase in total household loans during the first half of the year.
Although NH Nonghyup Bank exceeded the annual household loan growth target it had agreed upon with financial authorities in the first half of the year, it is reported that recent stabilizing trends have been observed following the implementation of strict loan restriction measures.
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On August 13, the Financial Services Commission announced that this year's target for the household debt growth rate would be doubled from the previous 1.5% to 3.0%. This expansion is estimated to increase the overall capacity for new loans across the financial sector by about 30 trillion won. The increase in allocations for each financial institution, as well as the methods for distributing general mortgage loans and group loans, will be finalized through consultations held on this day between the financial authorities and financial institutions.
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