South Korea's household debt is expected to surpass 2,000 trillion won, or about $1.4 trillion, for the first time when the Bank of Korea releases preliminary second-quarter 2026 household credit data on the 19th. Household credit stood at a record 1,993.1 trillion won at the end of March, and lending accelerated in the second quarter as financial-sector household loans rose 21.1 trillion won, led by a 14 trillion won increase in mortgage lending and a 9 trillion won rise in other loans including unsecured borrowing tied to stock investing. The Bank of Korea's policy-rate increase to 2.75% from 2.50% is expected to lift borrowing costs for variable-rate borrowers, while markets are also weighing the possibility of another hike as early as this month. Although South Korea's household debt-to-GDP ratio fell to 88.6% at the end of 2024, authorities say it remains high relative to major economies and continues to pose risks. The Financial Stress Index stood at 16.9 in June, remaining in the caution zone, while the central bank has warned that the share of vulnerable borrowers with limited repayment capacity has risen.