New Stress DSR Regulations Impacting Housing Loans and Prices

The new stress DSR regulations aim to reduce household loans and stabilize rising housing prices in the metropolitan area.

### Changes in Loan Regulations and the Stress DSR
The second phase of the stress DSR was implemented, reducing the housing mortgage loan limit in the metropolitan area by **about 36 million won**. The DSR determines how much of a person's income can be allocated to debt repayment, with a **maximum fixed ratio** to prevent excessive debt burden. The stress DSR accounts for potential interest rate increases, aiming to **adjust loan limits and provide a more accurate reflection of borrowing capacity**.

### Expansion of Loan Types and Impact on Housing Market
The application of loan types will expand to include **mortgage, credit, and other loans**, affecting both banks and non-bank institutions. The second stage of implementation has been postponed to **September 2024** due to concerns about its **impact on housing prices**. The additional interest rates for metropolitan and non-capital areas vary, with the capital areas experiencing a **significant burden**, leading to a **reduction in household loans** and a focus on **stabilizing the housing market**.

### Managing Household Debt and Housing Prices
The amount for loans will be **reduced by 30-35 million won** after September 1st, with authorities aiming to **manage household debt and housing prices**. Jeonse loans are currently not included in the DSR calculation but may be factored in later, causing **uncertainty**. Banks are voluntarily implementing regulations to reduce loan limits and lease loans, with Woori Bank taking a strong stance by **suspending jeonse loans** and not providing **additional housing loans to homeowners** in the metropolitan area.

### The Active Real Estate Market in Seoul
The real estate transaction volume in Seoul has **exceeded 10,000**, raising questions about market activity and potential exploitation. The high volume of transactions is expected to **drive up home prices**, compelling buyers to **stretch their finances**. The government's tightening of household loans and implementation of various policies aim to **stabilize the real estate market**, but there is **uncertainty and volatility** in the situation.

### Proactive Measures for Stabilizing the Loan Amount and Housing Market
Proactive measures are necessary to address the loan amount and stabilize the housing market, especially with **potential future demand surges**. There are differing opinions on including jeonse mortgage loans in the DSR calculation and adjusting the LTV ratio to **control property prices**. The government's recent easing of LTV regulations has had a slow response but is believed to have **contributed to a rise in housing prices**, highlighting the need for a **more active approach to stabilize household debt** and **increase the supply of new apartments** in the metropolitan area.

### Urgent Measures Needed to Stabilize Housing Prices
There is a clear need for **urgent action to stabilize housing prices**, as the difference between top-ranked and bottom-ranked apartments is defined by **location**. The lack of new supply exacerbates the issue, making it challenging to **bridge the gap in housing prices**. The rising household debt and its impact on **interest rate decisions** further complicate the situation, highlighting the need for a **comprehensive approach** to address these challenges.

### Understanding the Second Phase of Stress DSR and Its Impact on Housing Loans
* 🏠 The second phase of the strengthened loan regulation, known as the **stress DSR**, was implemented on September 1st, resulting in an expected **decrease of about 36 million won** in housing mortgage loan limits in the metropolitan area compared to August.
* 📉 The Debt Service Ratio (DSR) measures the portion of income allocated to debt repayment, with a limit set to **prevent the burden from exceeding 40% of income**, ensuring that households can **manage their debt effectively**.
* 💡 The stress DSR adjusts for potential interest rate increases, which could **significantly affect borrowers**, especially those with **variable interest rates**, thereby necessitating **stricter loan limits**.
* 🔍 The first stage of the stress DSR raised the virtual interest rate by **25%**, while the second stage, which applies to bank and mortgage loans, will increase it by **50%**, leading to a total expected rise of **1.5%** in the third stage.
* 🏦 With the new regulations, borrowers in the metropolitan area with an income of 50 million won may see their mortgage borrowing limit **drop from 310 million won to approximately 287 million won**, while non-metropolitan areas may allow **up to 320 million won**.
* 📊 The authorities aim to stabilize the housing market and household debt through these measures, as **rising real estate prices** have led to **increased borrowing and financial strain on households**.
* 🏛 Discussions are ongoing regarding the potential inclusion of jeonse loans in DSR calculations, reflecting the government's efforts to **address the complexities of household debt and housing affordability**.
* 📈 Ultimately, the Bank of Korea is closely monitoring the situation, as **rising household debt could influence future interest rate decisions**, highlighting the delicate balance between **managing debt and maintaining housing market stability**.

“주담대 얼마나 나올까?” 2단계 스트레스 DSR 시행…한도 ‘확’ 줄어든다

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