KB Kookmin Bank caps home-purchase loans at W300m in sweeping move

KB Kookmin Bank will cap home-purchase loans at 300 million won ($197,000), the lender announced Wednesday, describing the move as a preemptive step to keep household lending in check.

Starting Friday, Kookmin Bank will apply the 300 million won ceiling on home-purchase loans until further notice.

Under the new rules, the loan limit for properties in Greater Seoul and regulated zones will be cut from 600 million won to 300 million won, while non-regulated areas will be subject to a cap for the first time. For homes in regulated zones valued above 2.5 billion won, the existing government-mandated ceiling of 200 million won will continue to apply.

The bank's new cap is stricter than the government's own mortgage limits for Greater Seoul and regulated areas. Under current government rules, mortgage loans are capped at 600 million won for homes valued at 1.5 billion won or less, 400 million won for homes valued between 1.5 billion won and 2.5 billion won, and 200 million won for homes valued above 2.5 billion won.

The cap will not apply to group loans — including relocation costs, interim payments and balance payments — nor to government housing funds, the Bogeumjari loan program, or loans for victims of jeonse fraud purchasing or acquiring properties through court auction.

Kookmin Bank refinancing and re-lending arrangements that do not increase the loan principal, as well as debt assumption through inheritance, are also exempt from the new limit.

"Looking at recent housing transaction trends, there are signs that the real estate market is picking up again," a Kookmin Bank official said. "We want to proactively rebalance our household lending portfolio to keep household loans on a stable footing. We plan to operate with both the protection of genuine end-users and financial market stability in mind."