S. Korea to limit mortgage lending in Seoul areas

SEOUL, Sept. 4 (Yonhap) -- South Korea's financial watchdog said Friday it will
impose limits on bank mortgage lending in the capital Seoul and two adjacent
areas to curb a recent surge in such loans.
Rising home-backed loans, which come amid soaring apartment prices in the capital
region, are widely feared to sharply increase household debts and pose a serious
threat to the health of lenders.
The new rules, effective Monday, will bar home buyers in Seoul from spending more
than 50 percent of their annual income to service mortgage loans exceeding 50
million won (US$40,300), according to the Financial Supervisory Service.
Currently, three posh residential areas in the capital are subject to a 40
percent debt-to-income (DTI) ratio.
A 60 percent DTI ratio will be applied to home buyers in the Gyeonggi and Incheon
areas, the watchdog said.
pbr@yna.co.kr
(END)