Banks in South Korea have implemented stricter measures on mortgage loans to address concerns about soaring housing prices in Seoul and increasing household debts. The Financial Services Commission has instructed banks to enhance the screening process for new mortgage applicants and reduce the loan sizes available under the tightened criteria. The stress debt service ratio (DSR), which determines the proportion of a borrower's income allocated to paying off principal and interest, acts as a cap on total lending. Originally scheduled for implementation in July, the more stringent regulations were postponed by two months. Despite tightened lending standards and high interest rates, household credit surged in the second quarter, driven by a rise in home-backed loans. At the end of June, outstanding household credit stood at 1,896.2 trillion won ($1.419 trillion), marking a 13.8 trillion won increase from the previous quarter and a significant rebound from the 3.1 trillion-won decline in the quarter prior. (Source: Yonhap)