(MENAFN) In a new proposal to improve managing household debt, financial regulator of South Korea will oblige first-tier banks to apply a stricter rule for mortgage lending in the fourth quarter of 2018.
The new home mortgages rule will have a new ratio that measures all debt principle and interest payments as an amount of annual income.
According to officials at the Financial Services Commission (FSC), the financial regulator, have said the DSR system will improve evaluate a borrower's repayment ability and eliminate a potential default risk.
Second-tier banks, including as savings banks and credit unions, will start a trial operation of the DSR system during the third-quarter of next year.
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