Financial authorities set a 1.5 percent target for household debt growth.

The Financial Services Commission held a joint inter-agency household debt review meeting at the Government Complex Seoul on Tuesday and announced measures to manage household debt in 2026.

The FSC set this year’s target for household loan growth at 1.5 percent, below last year’s result of 1.7 percent. Over the medium to long term, it aims to lower the household debt ratio to about 80 percent by 2030. It will also reduce the share of policy finance to 20 percent from 30 percent.

Oversight of financial firms will also be strengthened. Firms that exceed targets will face penalties. In particular, some mutual finance institutions will be subject to controls that effectively limit loan growth.

The authorities will also introduce separate criteria to manage mortgage loans to prevent distortions in loan structures. They plan to ease the problem of a year-end credit crunch through monthly and quarterly management.

The plan also includes demand-curbing measures. Multi-homeowners will in principle face limits on maturity extensions for apartment-backed loans in the Seoul metropolitan area and other regulated areas. Exceptions will be allowed in cases such as tenant protection or unavoidable reasons.

They will also step up inspections of irregular and illegal lending. Authorities will conduct a full inspection of cases in which business loans are used to acquire real estate and will significantly strengthen sanctions, including restricting borrowing from all financial sectors when violations are found.

Financial authorities said the key is to cut excessive links between real estate and finance and guide finance to flow into productive sectors, stressing their intent to shift the structure.