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Mortgage Loans Growing Rapidly in South Korea
Despite Gov't Control on Household Loans
Mortgage Loans Growing Rapidly in South Korea
  • By Yoon Young-sil
  • December 16, 2019, 11:38
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Banks' mortgage loans showed the largest increase in 11 months in November this year amid rising housing prices.

Despite the South Korean government’s household loan control policy, the mortgage loans in the banking sector showed the largest increase in 11 months in November this year with the prices of houses in Seoul rising. Mortgage loans of more than 40 trillion won were executed for the first 11 months of this year and the rate of increase is likely to hit a three-year high this year.

The Bank of Korea and the Financial Services Commission announced on Dec. 11 that the mortgage loans in the banking sector increased by 4.9 trillion won last month with the security deposit loans, which increased by 2.4 trillion won in October, increasing by 2.7 trillion won.

From January to November this year, the banking sector executed mortgage loans of 40.1 trillion won in total. For reference, the total was 37.2 trillion won in 2017 and 37.8 trillion won in 2018.

On the other hand, the other loans in the banking sector and the loans in the non-banking sector are showing no substantial increase, which means the total household loans are likely to remain stable for the time being. The household loans in the entire financial sector increased 6.5 trillion won last month whereas the amount of increase was eight trillion won in the same period of the previous year. In addition, the household loans in the banking sector increased seven trillion won, 300 billion won less than in the same period of the preceding year, with the increase in non-mortgage loans slowing down from 2.5 trillion won to 2.1 trillion won.