[Edaily Reporter Kim Se-yeon ] While mortgage loans issued by domestic banks have increased by about 20% over the past three and a half years, the amount of delinquent loans has more than doubled. In particular, the amount of long-term delinquencies—loans where principal and interest have not been paid for three months or more—has surged nearly threefold, leading to a rapid accumulation of non-performing loans, especially among vulnerable borrowers.

According to the “Status of Mortgage Loan Soundness at Domestic Banks” report submitted to Rep. Park Seong-hoon of the People Power Party—a member of the National Assembly’s Political Affairs Committee—by the Financial Supervisory Service on the 8th, domestic banks’ mortgage loan portfolios increased by 21%, from 644.3 trillion won at the end of 2022 to 779.2 trillion won at the end of June this year.
During the same period, delinquent loans—those where principal and interest payments have been overdue for one month or more—increased 2.2-fold, from 1 trillion won to 2.2 trillion won. This means that delinquent loans are growing at a rate approximately six times faster than the overall loan portfolio.
What is even more striking is that the duration of delinquency is lengthening. Delinquent loans—those where principal and interest have not been paid for three months or more—increased nearly threefold, from 500 billion won at the end of 2022 to 1.4 trillion won as of the end of June this year. Compared to the overall growth rate of mortgage loans, this represents a pace that is approximately 8.6 times faster. This indicates that nonperforming loans—which go beyond mere one- or two-month delinquencies and lead to long-term defaults—are accumulating.
Non-performing loans—those deemed unlikely to be recovered—have also risen rapidly. Non-performing loans, which include fixed-class, doubtful, and estimated loss categories, more than doubled from 800 billion won at the end of 2022 to 1.7 trillion won by the end of June this year. The loan loss reserves set aside by banks to prepare for mortgage loan defaults also tripled, rising from 300 billion won to 900 billion won. This could place a burden on banks’ future profitability and financial soundness.
Rep. Park Seong-hoon stated, “While mortgage loans themselves have increased by 20% over the past four years, the fact that delinquent loans have more than doubled is a warning sign that households’ ability to repay debt is not keeping pace with the rate of loan growth,” adding, “Financial authorities must proactively assess the risks posed by vulnerable borrowers and non-performing group loans.”