iM Bank halts mortgage insurance products as lending curbs spread across banking sector

iM Bank has joined the broader banking sector's push to tighten lending as restrictions on home loans spread across the industry.

According to financial industry sources, iM Bank suspended new subscriptions to mortgage credit insurance (MCI) and mortgage credit guarantees (MCG) for in-person home loans starting Monday. The bank also halted new applications for non-face-to-face personal credit loans intended to refinance loans at other banks on the same day.

MCI and MCG are insurance and guarantee products taken out alongside home loans. They offset reductions in loan limits caused by the deduction of small-sum tenant deposit amounts during the loan ceiling calculation process. Restricting access to the two products effectively lowers the maximum amount borrowers can receive on a home loan.

Major commercial banks, including KB Kookmin Bank and Shinhan Bank, have also been raising their lending thresholds in recent weeks, successively restricting mortgage insurance subscriptions to tighten overall household loan volume management.

KB Kookmin Bank, which had already restricted MCI and MCG subscriptions, on Friday cut the maximum loan limit for home-purchase loans in the Greater Seoul area and regulated zones from 600 million won ($399,000) to 300 million won. Shinhan Bank, Hana Bank and NH NongHyup Bank have also restricted new MCI and MCG subscriptions, reducing their home loan ceilings.