South Korean commercial banks plan to tighten lending standards for households in the third quarter of 2026 amid growing credit risk concerns. The bank lending attitude index stood at minus 7, down from minus 2 in the previous quarter, marking the sixth consecutive quarter in negative territory since the second quarter of 2025, as authorities tighten regulations to curb household debt and rising home prices in Seoul and surrounding areas. The Bank of Korea indicated that both mortgage and other household loans may face stricter controls. A survey of 203 financial institutions, including 18 banks, showed that demand for mortgage loans is likely to decline, but demand for general loans may rise due to stock market investment appetite. Business loan demand is expected to increase from both large companies and SMEs amid uncertainty from the Iran crisis.