BOK employees dodge tighter mortgage rules with nearly 6 billion won in internal lending debt
The central bank had 5.96 billion won in outstanding housing loans by employees on the books even as rules for commercial banks limit options for the public.
Bank of Korea's headquarters in central Seoul on Aug. 12, 2025
YONHAP
Bank of Korea (BOK) employees had nearly 6 billion won ($4 million) in outstanding mortgage loans through the bank's lending program as of June, even as tighter government lending rules have made it harder for ordinary households to borrow.
A total of 150 central bank employees were using the central bank’s employee housing loan program as of the end of June, with outstanding loans totaling 5.96 billion won, according to data submitted by the BOK to People Power Party Rep. Kim Sang-hoon, a member of the National Assembly’s Finance and Economic Planning Committee.
The BOK continues to operate its own employee lending program outside the conventional financial system, a practice common among major corporations in Korea.
Of the employees who took out a loan, 122, or 81 percent, had mortgage loans with a combined outstanding balance of 4.8 billion won. The remaining 28 employees held housing lease loans totaling 1.15 billion won. The average outstanding loan per person was 39.4 million won for home purchases and 41.2 million won for housing leases.
The interest rate on the BOK’s mortgage loans was 3.5 percent per year in the first half, 0.8 percentage points below the 4.3 percent average rate on newly extended loans for home purchases by banks over the same period, according to the BOK’s Economic Statistics System.
The central bank offers housing loans of up to 50 million won to employees who have worked at the bank for at least a year, do not own a home and are seeking to buy or rent one. Mortgage loans are repaid through equal-principal installments over 20 years, while the principal on leasing loans is repaid in a lump sum when the contract ends.
The BOK’s employee loans are not reported to credit bureaus, so unlike loans from conventional financial institutions, they are not directly reflected in calculations of borrowers’ debt service ratio. This means that an employee’s actual debt burden may not be fully captured if the borrower takes out an internal BOK loan and later obtains additional financing from a bank or other institution.
The issue could also raise questions of fairness as the government’s stringent household lending restrictions have made mortgages and jeonse (lump-sum deposit) loans harder for the general public to obtain.
Financial authorities have recently urged private companies to strengthen oversight of their own employee loan programs. They have recommended that firms voluntarily introduce measures such as registering first-priority mortgage liens, requiring installment repayment of principal and interest, and restricting loans for employees who own multiple homes.
BY KIM JI-HYE [kim.hayoon1@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
