South Korea cuts performance‑bonus weight in mortgage DSR to curb housing loan growth

South Korea’s Financial Services Commission announced that the proportion of one‑off performance bonuses used in income assessments for mortgage loans will be reduced. When calculating the total debt‑service ratio (DSR), the regulator will shift from using a two‑year average of income to a three‑year average, limiting the impact of large bonuses paid to employees of companies such as Samsung Electronics and SK Hynix.

The change aims to keep annual household‑loan growth at the target of 1.5%, tighten capital requirements for high‑risk mortgages, and maintain a clear separation between real estate and finance. The DSR ceiling remains at 40%, and variable mortgage rates are expected to rise soon. KB Kookmin Bank has already halved its mortgage limit from 600 billion won to 300 billion won, but the regulator said other banks are not required to follow the same cut.

Additional measures include higher capital buffers for large‑loan and multi‑home borrowers and broader policy steps to curb speculative home‑buying in the semiconductor‑belt regions where house prices have surged.