South Korea Raises Mortgage Risk Coefficient from 3.5% to 4% Starting September 30

According to Yonhap Infomax, South Korea's financial regulator announced on July 8 that it will raise the risk coefficient for mortgage loans held by insurers from September 30. For mortgages with loan-to-value ratios of 60-80%, the coefficient will increase from 3.5% to 4%, raising capital requirements under the K-ICS (Korean Insurance Capital Standard) framework.

The policy aims to redirect capital from real estate toward productive financing sectors like venture capital and infrastructure. The measure is expected to increase credit risk assets by approximately 78.6 billion Korean won and lower the K-ICS ratio by 0.1 percentage points.