South Korean financial authorities will likely introduce very strict debt-to-income (DTI) ratios at the end of this month.
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​The Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) are taking administrative steps to introduce the tougher DTI ratios by the end of the month.
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​An official in the financial industry said that financial authorities are developing related software, adding that they were ordered to make preparations to introduce the new measure by January 31st.
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​Financial authorities issued advance notice for five related revisions, and FSC's regulatory reform committee is reviewing the revisions, which will likely be approved by the end of the month at the latest.
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​The DTI – a key gauge measuring borrowers' repayment capability against their income – measures what proportion of a homeowner's monthly income is used to pay off debt and interest.
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​The current DTI rules reflect only the amount of interest on their payment ability. However, under the new rules, the amount of both loan principal and interest will be reflected, making it more difficult for those who own two or more homes to get mortgages.