The financial authorities are struggling with the Household Debt Management Plan, which is scheduled to be announced next week, as voices grow that the government should tighten the rapidly increasing household debt, but release loans from young people and misdemeanors.
According to the financial sector on the 17th, the Financial Services Commission plans to announce plans to manage household debt by the latest in April, as household debt reached 100% of GDP and the increase has also been steep.
According to the Korea Institute for Tax Finance and Finance's Comparative Study on the Changes in Total Debt and Debt by Sector, Korea's household debt to GDP in the second quarter of last year was 98.6 percent. The average household debt growth rate, which was 4 to 5% before Corona 19, also soared to 8% last year, with the average of 63.7% in the world and 75.3% in developed countries.
“The number of household loans has increased 폰테크 to overcome the Corona crisis,” Hong Nam-ki, the deputy prime minister and the Minister of Strategy and Finance, told the National Assembly’s special committee on budget settlement last month. “We plan to announce the management plan of household debt separately at the end of March as soon as possible.”
The Financial Services Commission is considering a plan to convert the total debt repayment ratio (DSR) by borrower; the DSR currently manages the management index at an average of 40%. Banks have also borrowed more than 40 percent of their loans to borrowers who are able to repay only by matching the average. The goal is to turn the debt growth rate to 4%.
Some point out that DSR regulations could harm young people, as it is likely that even though they are actual buyers, they will have difficulty in implementing loans due to lack of income.
Accordingly, the financial authorities are considering expanding the maturity of policy mortgages (housing mortgage loans) for up to 30 years to 40 years for young and newlyweds, and calculating DSR by reflecting the future income of young people. Some propose to increase the addition point of the total debt repayment ratio (DTI) and the collateral recognition ratio (LTV) that are granted only to ordinary people and actual customers from 10 percentage points to 20 percentage points, or to broaden the application requirements.
The ruling party also argues that financial regulations should be released only for homeless and young people around the April 7 re-by-election. Choi In-ho, a senior spokesman for the Democratic Party of Korea, said, "The measures for the homeless, young people, newlyweds, and workers should be more detailed," and emphasized, "In terms of creating conditions for the homeless and young people to prepare real houses,
It is in a dilemma that the threshold for actual buyers should be lowered while the loan is being tightened. If the loan regulation is excessive or there is a lack of benefits for actual customers, they will face criticism that they kicked the housing ladder. On the contrary, if the level of loan relief is large, it will undermine the purpose of household debt management.
The easing of youth lending is also at risk of touching the real estate buying sentiment, which manages to remain stable. According to the Financial Supervisory Service, 46.3% of the newly treated mortgage loans in the six major commercial banks last year were under 40 years of age. This is why the Young-Chul (drawing to the soul) movement centered on 20/30 is likely to be reproduced, as in July last year, when the number of Seoul apartment purchases in households under 30s was the highest ever, as the target of easing is young people.
An official of a commercial bank said, "If the regulations are released, it will certainly help the young people to build their own houses." He warned, "We can send a wrong signal to the real estate market that has tried to catch prices through regulation."
Eun Sung-soo, chairman of the finance committee, is considering a compromise."It is a conflict that the household debt is reduced steadily and the lending of young people is flexible," he said at a meeting with reporters.