As mortgage loan regulations expand, financing conditions for end users are tightening. Banks are increasingly turning borrowers away at the consultation stage, prompting some to cover shortfalls with credit loans. Demand has shifted to mutual finance lenders, but they are also restricting lending, while savings banks face tougher volume caps. Authorities have capped some savings banks’ household loan growth at 0 percent, raising concerns that borrowing is shifting from mortgages to higher-rate credit loans.

The Bank of Korea\'s Monetary Policy Board on Thursday kept the benchmark interest rate unchanged at 2.50 percent and maintained its monetary policy stance. The decision reflected heightened uncertainty as the Middle East war increased both inflationary and growth-slowing pressures and widened volatility in financial and foreign exchange markets. The board said domestic growth faced downside risks, inflation pressures were rising, and future policy would consider price and financial stability.