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.

NH NongHyup Bank said on April 17 it will launch a “local settlement finance package” from the end of this month for regions outside the Seoul metropolitan area to support local economic revitalisation and balanced national development. The programme will run through end-2026 with a 1 trillion won cap for new mortgage borrowers. It will offer a 0.2 percentage-point preferential rate, waive early repayment fees and have the bank cover stamp duty in full.