Second-tier lenders in South Korea will adopt tougher mortgage rules this week.

Starting Monday, the lending calculation for home mortgages, named the Debt Service Ratio (DSR), will be more strictly managed.

This new system measures all debt principal and interest payments as a proportion of annual income.

Major commercial banks adopted the stricter lending criteria for mortgages last year.

Mutual savings including Nonghyup are required to reduce their average ratio as high as around 260 percent to 160 percent by the end of 2021 and to 80 percent by 2025.

Savings banks must lower their current average ratio over 110 percent to 90 percent by the end of 2021, while insurers should reduce it from the current 73-point-one percent to 70 percent.