South Korea Household Credit Reaches Record 1.98 Trillion Won in Q4 2025

Updated 2026-02-20 04:53:45+00:00 (4 articles)

Image: Yonhap

This file photo taken Nov. 17, 2025, shows apartment buildings in Seoul. (Yonhap) Source Full size

Record‑High Credit Level and Continued Quarterly Rise End‑December 2025 data show household credit at 1,978.8 trillion won (US$1.36 trillion), the highest since the Bank of Korea began tracking the series in 2002, marking the seventh straight quarterly increase despite a decelerating pace for the second quarter in a row [1]. The total rose 14 trillion won from the previous quarter, confirming persistent borrowing pressure even as regulatory tightening intensifies.

Mortgage and Credit‑Purchase Expansions Ease Mortgage lending grew to 1,170.7 trillion won, up 7.3 trillion won, while credit‑purchase loans reached 126 trillion won, increasing by 2.8 trillion won, both slower than the prior quarter’s jumps of 12.4 trillion won and a larger credit‑purchase rise respectively [1]. Household loans overall climbed 11.1 % to 1,852.7 trillion won, indicating that the slowdown is confined to key sub‑segments.

Government Tightens Mortgage Caps and Expands Speculative Zones An October policy package added 21 Seoul districts to the speculative‑zone list, now covering all 25 districts, and lowered the mortgage‑loan cap to 200 million won from the previous 600 million won set in June [1]. These measures aim to curb housing‑price volatility and limit high‑leverage borrowing.

Bank of Korea Official Warns of Persistent Uncertainty Lee Hye‑young of the Bank of Korea cautioned that while strict government management should prevent sharp debt spikes, uncertainty remains high due to late‑year housing activity and banks resuming lending at the start of 2026 [1]. The warning underscores potential risks despite the current flattening of debt growth.

Annual Credit Growth Fastest Since 2021 For the full year 2025, household credit rose by 56.1 trillion won (2.9 %) from 2024, representing the quickest yearly increase recorded since 2021 [1]. This annual surge highlights the broader momentum behind household borrowing despite quarterly slowdowns.

Sources

1.
Yonhap: South Korea’s Household Credit Hits Record High in Q4 2025 Amid Tighter Rules: The article reports the record‑high credit figure, slower quarterly growth, and recent policy tightening, emphasizing the BOK official’s warning and annual growth context.
2026-02-20 04:53:45+00:00

Timeline

2021 – South Korea records its previous fastest annual household‑credit growth, a benchmark that 2025’s 2.9 % rise later surpasses, underscoring the long‑term upward pressure on household debt[1].

Oct 2025 – The government rolls out a policy package that adds 21 Seoul districts to the speculative‑zone list (covering all 25 districts) and slashes the mortgage‑loan cap from 600 million won to 200 million won to curb property‑price inflation[1][2].

Jan – Jul 2025 – High‑value home gifts filed during this period miss statutory gift‑tax deadlines, prompting the National Tax Service to flag 2,077 transfers for audit as potential tax‑evasion schemes[4].

Mar 2025 – Average household net assets climb 5 % to 471.44 million won, driven by rising home prices and financial assets, while the net‑asset Gini coefficient hits 0.625, the highest since 2012, signalling deepening wealth inequality[3].

Nov 2025 – Household loan growth slows; outstanding loans rise 1.9 trillion won to 1,175.6 trillion won, with home‑backed loans gaining only 700 billion won and unsecured loans up 1.2 trillion won, reflecting the impact of October’s tighter lending rules[2].

Dec 2025 (Q4) – Household credit reaches a record 1,978.8 trillion won, marking the seventh consecutive quarterly increase but with a decelerating pace; mortgage lending grows 7.3 trillion won to 1,170.7 trillion won and credit‑purchase loans rise 2.8 trillion won to 126 trillion won[1].

Dec 4 2025 – The National Tax Service announces audits of the 2,077 high‑value property‑transfer cases in Gangnam, Mapo, Yongsan and Seongsu, targeting schemes that use gifting and nominal loans to evade taxes amid stricter mortgage caps[4].

Early 2026 – Bank of Korea officials anticipate that banks will resume lending at the start of the year, a shift that could stabilize household‑debt dynamics after months of tightened credit conditions[1].

Feb 20 2026 – Lee Hye‑young of the Bank of Korea warns that while strict government management may keep debt flat, high uncertainty remains because of late‑year housing activity and the upcoming resumption of bank lending[1].

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