Increase in Household Loan Amount Reached New High in October

The Bank of Korea announced on Dec. 8 that the amount of household loans provided by depository institutions increased by 11.8 trillion won in October this year. The increment is 51.3 percent larger than that of October 2014 and the largest since records began in Oct. 2003. The cumulative amount goes up to 12 trillion won when the mortgage loans transferred to the Korea Housing Finance Corporation and those handled by the National Housing Fund are included.

By item, the residential mortgage showed an increase of 7.5 trillion won, 2.1 trillion won larger than a year ago. The other loans including those secured by savings, deposits and deficit accounts almost doubled from 2.4 trillion won to 4.3 trillion won during the same period because in part of the government’s policy for boosting consumption.

Under the circumstances, the total household debt reached 792.4 trillion won as of the end of October this year. The amount is likely to add up to 801.1 trillion won at the end of this year given that it increased by a monthly average of 4.35 trillion won in the first 10 months of 2015. In addition, the amount of household loans swells to 200 billion won short of 900 trillion won when the mortgage loans transferred in advance to the Korea Housing Finance Corporation are taken into account.