Following interest rate rises, home borrowers were found to spend an average of 40% of their income on principal and interest, with one in seven spending more than 70%.
In its Financial Stability Report, the Bank of Korea recently comprehensively examined the insolvency risk of the household sector and the DSR situation, and in the fourth quarter of last year, it revealed that the DSR, the ratio of principal repayment and interest repayment to the income of all households. loan lenders, on average 40.6%.
This is the first time in four years since the fourth quarter of 2018 that the average DSR of home loan borrowers has exceeded 40%.
Borrowers whose DSR was greater than 70% accounted for 15.3% of the total, or 1 in 7 borrowers, and 8.9%, or 1 in 11, of borrowers whose DSR was greater than 100% and their principal repayments and interest were higher than their income.
Based on the Bank of International Settlement, Korea’s DSR was 13.7% as of the third quarter of last year, the second highest among major countries after Australia’s 14.9%.
In addition, the overall home loan delinquency rate in the financial sector is expected to rise from the current 0.7% to 1.0% by the end of this year.
The Bank of Korea predicted that the impact on the soundness of the overall financial system would not be significant, although there were concerns about an increase in the delinquency rate of household loans, focusing on some non-bank financial institutions.
YTN Kim Ji-sun (sunkim@ytn.co.kr)
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