The measure has two components: lowering the loan-to-value ceiling on homes above a set price threshold, and adjusting the stress rate used in debt-service-ratio calculations so that effective borrowing limits fall.

The debt-service ratio divides a borrower's annual principal-and-interest obligations across all loans by annual income. Raising the assumed rate shrinks the amount a given income can support. Because it throttles credit without moving policy rates, it has been used repeatedly in recent years.

Confining the rules to high-priced homes signals an attempt to separate owner-occupier demand from investment demand. Critics note that in prime Seoul districts a large share of apartments already sits above the threshold, so ordinary buyers are caught too.

Analysts expect the effect to show up as fewer transactions rather than weaker prices. When credit tightens, sellers more often withdraw listings than cut asking prices, leaving headline prices flat and volumes down.

Spillover into the rental market is the other variable. Demand deferred from purchase tends to stay in leasing, pushing up jeonse demand — one reason supply measures are being announced alongside.

Hwagyo Sibo reports the direction and mechanics of the rules. What any individual household can borrow depends on income, existing debt and location, and should be confirmed with a lender.