Loan Tightening Squeezes Mortgages: Average Per Borrower Down $15,000; Seoul Sees $45,000 Drop

South Korea's financial landscape saw a notable contraction in new household lending during the second quarter of 2026, with mortgage loans experiencing the sharpest decline in three years. The average amount for a new mortgage loan per borrower fell by 9.2% to 208.29 million won, marking the lowest figure since the fourth quarter of 2024.

This overall decrease was particularly pronounced among borrowers in their 40s, who saw their new mortgage amounts shrink by 35.37 million won to an average of 209.77 million won. The Seoul metropolitan area also experienced a significant pullback, with new mortgage loans dropping by 60.65 million won to 271.4 million won per borrower. These trends are attributed to tightened lending regulations and a shift towards lower-priced home sales in the capital region.

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Due to the impact of lending regulations, the new loan amounts for existing loan holders have decreased, pulling down the overall average.

In contrast, borrowers in their 20s were the sole demographic to see an increase in new mortgage loans, rising by 3.92 million won to an average of 232.17 million won. This anomaly is linked to a higher proportion of first-time homebuyers and individuals without existing property in this age group, who face less stringent lending restrictions.

Despite the reduction in new loan origination, the total outstanding household debt per borrower slightly increased to 97.9 million won by the end of the quarter. This suggests that while new borrowing has slowed, existing debt burdens remain, and repayments may have decreased.

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The proportion of first-time homebuyers and those without property is relatively high among those in their 20s, and these loans are subject to less regulation, leading to an expansion of loan approvals.