A pedestrian passes by banners promoting mortgage products in front of a bank in Seoul, Wednesday. Yonhap

Koreans, on average, hold debt exceeding twice their annual income, according to data from the Bank of Korea, Wednesday.

Data released by Rep. Cha Gye-geun of the minor Rebuilding Korea Party revealed that the overall loan-to-income (LTI) ratio in the first quarter of this year stood at 233.9 percent.

The figure, which peaked at 238 percent in the second quarter of 2022, has been decreasing since then, falling to 233.9 percent in the fourth quarter of last year. However, it has remained at this level in the first quarter of this year.

All age groups, except those in their 50s, saw an increase in their LTI ratio in the first quarter of this year compared to the previous three months.

The ratio of those aged 30 and younger rose from 238.7 percent to 239 percent.

The ratio among individuals in their 40s increased from 253.5 percent to 253.7 percent, while rising from 239.1 percent to 240.8 percent for those aged 60 and older.

In contrast, the ratio of those in their 50s decreased from 208.1 percent to 205.6 percent, displaying a relatively lower level.

The figure for those in their 40s is particularly noteworthy, as this age group holds a total debt balance exceeding 2.5 times their annual income, the highest debt ratio across all age groups.

Cha attributed this high debt ratio to the practice of maxing out available loans to purchase homes, driven by their high prices.

According to data from Statistics Korea, the average debt held by households where the head is in their 40s was 125 million won ($94,000) last year. Of this amount, 72.7 million won, or 57.9 percent, consisted of mortgage loans.

Additionally, in the first half of this year, the balance of mortgage loans for those in their 40s at the four major banks — KB Kookmin, Shinhan, Hana, and Woori — rose by 8.1 trillion won compared to the end of the previous year.

“Those in their 40s, who should be the backbone of domestic consumption, have fallen into a debt trap,” Cha said.

“The increase in the LTI ratio is attributed to rising home prices and increasing mortgage loans. It is crucial for the government to find solutions to stabilize home prices.”