South Korea has announced plans to bring down the household debt growth to pre-COVID-19 levels.
At a meeting Thursday morning, Finance Minister Hong Nam-ki said the government will work to keep the growth in household debt at around four percent next year.
Hong acknowledged that the debt has been snowballing amid the COVID-19 outbreak.
Last year, growth in household debt jumped to 7.9 percent from a 4.1 percent increase in 2019.
This year, the government plans to limit it to five or six percent and slow the increase to about four percent by 2022.
As part of efforts to limit the growth in household debt, the government will gradually impose stricter screening rules for loans.
The finance minister added that the government will introduce the nation's first 40-year mortgage to help young people buy homes.
This is to ease the burden of tightened lending standards and to reduce the burden of debt repayment on people with low incomes.
Later on Thursday, the ministry also explained the details of the longer mortgages.
"We will launch 40-year mortgages for young people and newlyweds from the second half of this year."
The Financial Services Commission is jointly planning the mortgage with banks and the Korea Housing Finance Corporation.
Meanwhile, following the land speculation scandal linked to the state-run housing corporation, the government will also introduce new regulations for non-residential mortgages, such as loans to purchase land.
Min Suk-hyen, Arirang News.