DSR of mortgage borrowers increases significantly at rising interest rates … spend 60% of their annual income

As loan interest rates rose, the total principal and interest repayment ratio (DSR, annual principal and interest repayment to annual income) of borrowers (borrowers) who had taken out mortgage loans in the past more than 60% on average.

According to the results of Bank of Korea’s household debt (DB) database analysis on the 26th, the average DSR of mortgage borrowers in the third quarter was 60.6%, surpassing the 60% mark in three years and six months since the first quarter of 2019 .60.2%) stands This means that more than 60% of their annual income is spent on loan repayment.

It is interpreted that the borrower whose loan limit was determined in accordance with the authorities’ DSR regulation of 40% when taking out a loan also increased the DSR as the interest rate increased thereafter.

The DSR of borrowers with mortgage and unsecured loans increased more than those with mortgage loans only. According to the Bank of Korea, the DSR of home mortgage loans and credit loan borrowers has steadily increased from 64.6% in June last year to 70% in October this year.

Generally, borrowers whose DSR exceeds 70% are evaluated as unable to repay the monthly principal and interest properly, excluding the minimum living expenses from their income.

The Bank of Korea said, “It was found that about 1.8% of non-vulnerable borrowers turned into vulnerable borrowers in the second to fourth quarter of 2016 and second to the fourth quarter of 2017, when the interest rate increase and the situation real economic. relatively similar to the recent ones.”

According to Bank of Korea, the proportion of vulnerable borrowers, such as multiple debtors and low-income and low-credit borrowers who have borrowed from three or more financial companies, accounted for 6.32% of all home loan borrowers at the end of the period . September. The Bank of Korea said, “If internal and external conditions deteriorate in the future, the proportion of vulnerable borrowers is likely to exceed 8%, as in the past.”