South Korean banks will introduce tougher loan regulations on Monday in line with the government's move to tighten mortgage rules and stabilize the housing market.

According to the financial industry on Sunday, local banks will introduce tighter rules covering the debt service ratios (DSR), rent to interest (RTI) and loan to income (LTI) ratios.

The new DSR ratio will measure the principle and interest payments of a mortgage borrower's all existing loans as a proportion of their annual income.

Financial authorities plan to use the DSR as a supplementary index for loan appraisal for the next six months before finalizing details of the ratio in October.