South Korea's household debt growth slowed in the fourth quarter of last year due to the government's aggressive lending regulations. However, margin trading for stock investments surged, pushing cumulative household debt close to 2,000 trillion won and raising concerns about the need for closer monitoring.
According to the "Q4 2025 Household Credit" report released by the Bank of Korea on the 20th, household credit balance stood at 1,978.8 trillion won as of the end of December last year, up 14 trillion won from the previous quarter. The increase was slightly smaller than the prior quarter's 14.8 trillion won rise.
Household credit refers to comprehensive household debt, which includes loans from banks, insurers, lending companies, and public financial institutions, plus credit card spending before settlement (sales credit).
The slowdown in household debt growth was driven by moderating household loan increases. Household loan balance reached 1,852.7 trillion won at the end of last year, rising 11.1 trillion won from the previous quarter—down from the prior quarter's 11.9 trillion won increase. The October 15 real estate measures significantly curbed mortgage loan growth. Mortgage loans grew 7.3 trillion won in Q4 last year, slowing from the prior quarter's 12.4 trillion won increase.
However, other loans rose 3.8 trillion won, reversing the prior quarter's 500 billion won decline. The shift came as credit loans from deposit banks and policy loans from insurance companies increased, while the decline at specialized credit finance companies (card loans) narrowed. Credit from securities firms and other financial intermediaries grew 2.9 trillion won, attributed to increased margin trading amid the stock market rally.
Sales credit, excluding household loans from household credit, totaled 126 trillion won, up 2.8 trillion won. This was smaller than the Q3 increase of 2.9 trillion won.
While Q4 household debt growth slowed, annual figures show household credit rose 56.1 trillion won throughout 2025—the largest annual increase in four years since 2021's 132.8 trillion won.
A Bank of Korea official said, "While mortgage growth has somewhat stabilized due to housing market stabilization measures, lending continues to rise centered on non-bank financial institutions and other loans, requiring close monitoring."
