In November 2024, South Korea's central bank reduced the base rate to three percent. Between May 2020 and January 2023, the rate had seen a continuous increase, impacting especially the housing market during this time.

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As of the fourth quarter of 2024, the variable mortgage loan interest rate in South Korea stood at 4.9 percent. The rate experienced a significant increase from the third quarter of 2022 to the first quarter of 2023 but has since begun to decline.

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As of the fourth quarter of 2024, the interest rate for leasehold deposit, or "jeonse," loans in South Korea stood at 4.3 percent. While the "jeonse" interest rate saw a significant increase between the third quarter of 2022 and the first quarter of 2023, it has since begun to decline. "Jeonse" is a rental deposit system unique to South Korea where tenants pay large amounts of money up-front in exchange for a two-year tenancy with little to no monthly rent.

As of the fourth quarter of 2024, the fixed mortgage loan interest rate in South Korea stood at 3.8 percent, continuing its trend of quarterly increases since the third quarter of 2023.

In 2023, the average interest rate for new business loans to large enterprises in South Korea stood at 5.21 percent. This was the highest rate since 2012 and considerably higher than the 2.57 from 2021.

In 2024, the average interest rate for new mortgage loans in South Korea stood at around four percent, a decrease from the previous year's 4.37 percent. The average interest rate for new mortgage loans in South Korea saw a nearly two percentage point increase from 2020 to 2022.

In 2023, the average interest rate for new loans to small and medium-sized enterprises in South Korea stood at 5.34 percent. This was the highest rate of the past ten years, increased considerably from 2.98 percent in 2021.

In 2024, the average interest rate for new loans to businesses in South Korea stood at 4.85 percent, down from the previous year's 5.3 percent. The average interest rate for new loans to businesses in South Korea has decreased since 2015, though this recent increase is approaching interest rates from a decade ago.

In 2024, the average interest rate for new loans to households in South Korea stood at 4.44 percent, down from the previous year's near five percent. The average interest rate for new loans to households in South Korea saw a significant rise between 2020 and 2023.

The mortgage rate for new loans in South Korea stood at 4.2 percent in the fourth quarter of 2024, up around 0.6 percentage points from the previous quarter. The mortgage rate for new loans has declined from a peak of 4.73 in the fourth quarter of 2022.

The interest rate for mortgages provided by mutual savings banks in South Korea stood at 6.28 percent in the third quarter of 2024. The interest rate by these mutual savings banks, a type of non-banking financial institution, decreased by over one percentage point from the first quarter of 2023.

As of the fourth quarter of 2024, the interest rate for mortgages offered by mutual credit institutions, a type of non-banking financial institution in South Korea, stood at 4.4 percent. This rate saw an increase from the third quarter of 2022 to the first quarter of 2023 but has since declined.

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Home Equity Lending Market Size 2025-2029

The home equity lending market size is forecast to increase by USD 48.16 billion at a CAGR of 4.7% between 2024 and 2029.

The market is experiencing significant growth due to several key trends. One major factor driving market expansion is the massive increase in home prices, which has resulted in homeowners having more equity in their properties. Another trend is the rise in residential property values, leading to an increase in the number of homeowners with sufficient equity to access loans or lines of credit, with property management and digital lending playing a significant role in facilitating these transactions.
However, the lengthy procedures involved in securing these loans can present challenges for both lenders and borrowers. Despite this, the benefits of lending, such as lower interest rates compared to other types of debt, make it an attractive option for many consumers looking to finance home improvements, debt consolidation, or other major expenses. Overall, the market is poised for continued growth in the coming years.

What will be the Size of the Home Equity Lending Market During the Forecast Period?

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The market in the United States has experienced significant growth, driven by the increasing collateral value of residential real estate and the resulting equity available to borrowers. Monetary authorities' efforts to keep inflation in check and stable housing prices have contributed to this trend. Homeowners have utilized loans and lines of credit to fund various expenses, including home improvements, tax deductions, and debt consolidation.



The interest rate on these loans often remains competitive with other forms of borrowing, making them an attractive option for many. Banks and credit unions are the primary providers of these loans, offering borrowers the ability to access a lump sum amount or a revolving line of credit secured against their residence and property. Regulatory restrictions on high-interest debt and outstanding mortgages may impact the market's growth, but the demand for loans is expected to remain strong as homeowners continue to seek ways to access the value of their homes.

How is this Home Equity Lending Industry segmented and which is the largest segment?

The home equity lending industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Source

  Mortgage and credit union
  Commercial banks
  Others


Distribution Channel

  Offline
  Online


Geography

  North America

    Canada
    US


  Europe

    Germany
    UK
    France


  APAC

    China
    Japan
    South Korea


  South America



  Middle East and Africa

By Source Insights

The mortgage and credit union segment is estimated to witness significant growth during the forecast period.

Home equity lending is a financing solution for homeowners looking to access the value of their property. Mortgage and credit unions serve as trusted providers in this market, offering various financial services including loans and lines of credit. These institutions not only offer consumer loans but also manage deposits, handle checking and savings accounts, disburse credit and debit cards, and grant house loans. Credit unions, in particular, provide personalized services with live representatives, ensuring a human touch in understanding complex financial matters.

Homeowners can secure competitive rates on loans through credit unions, making them a preferred choice over other lenders. With a strong focus on consumer protection and affordability, mortgage and credit unions are an excellent option for homeowners seeking to tap into their for renovation projects or other financial needs.

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The mortgage and credit union segment was valued at USD 82.39 billion in 2019 and showed a gradual increase during the forecast period.

Regional Analysis

North America is estimated to contribute 47% to the growth of the global market during the forecast period.

Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market in North America experienced notable growth in 2024, driven by the increase in home values and fewer regulations. Homeowners in Canada have been utilizing their properties as collateral for loans, with residential mortgages accounting for 74% of household debt and lines of credit for 16%. The balance of Lines of Credit (HELOC) rose by 1% to USD 128 billion in February 2022.

According to a survey on homeownership in South Korea in January 2023, those aged 60 years and older were most likely to answer that they should own their house despite rising interest rates among age groups. On average, around 47 percent of respondents agreed that they should own a home even in the case of rising interest rates and higher loan burdens.

가나의 단기 이자율은 2024-10에 25.80 % pa로 보고 되었습니다. 이는 2024-09에 25.07 % pa라는 이전 수치에 비 해상승한 기록입니다.가나의 단기 이자율 데이터는 월간 간행물마다 업데이트 되며,339개의 관측으로 1996-08부터 2024-10사이에 평균 22.79 % pa입니다. 이 데이터는1997-11에 47.93 % pa라는사상 최고치를, 2011-10에 9.13 % pa라는 최저치를 기록했습니다. 가나’의 단기 이자율 데이터는 CEIC에 활성 상태로 남아 있으며CEIC Data에 의해 보고되는 정보입니다. 본 데이터는 World Trend Plus의 Global Economic Monitor - Table: Short Term Interest Rate: Monthly하에 분류 됩니다.

In the third quarter of 2024, around 25.1 percent of mortgages were floating mortgages linked to the deposit interest rate. Figures dropped by six percentage points from the third quarter of 2023.

In the third quarter of 2024, nine percent of mortgages were floating mortgages linked to the market interest rate. Figures dropped just over two percentage point from the third quarter of 2023.

The value of mortgage loans provided by the five largest banks in South Korea combined stood at approximately 513 trillion South Korean won in July 2023. Figures have seen a steady increase in the mortgage loan balance of the banks in the past several months.

Rising interest rates Despite the base rate of the Bank of Korea having risen, demand for mortgages has continued to grow into the second quarter of 2023. With this, interest rates for mortgage loans also increased. Although fears of a declining housing market had spread throughout the country, this had not discouraged consumers from taking out loans.

South Korea's bogeumjari loans In South Korea, bogeumjari loans have become a popular type of mortgage loan as they have fixed and favorable rates designed to support prospective first-time homeowners. Of the bogeumjari loans provided, loans with a term of 30 years were issued the most in the previous year. Hana Bank lent the most among the largest banks in the country in 2022, followed by KB Kookmin Bank. Given the volatility of the housing market, much attention will be paid to the impact of these loans on housing prices in the following months.