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Korean Household Debt Increases by 2.8 Trillion in July
Household Debt
Korean Household Debt Increases by 2.8 Trillion in July
  • By matthew
  • August 14, 2014, 05:45
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Household debt from banks increased by 2.8 trillion won (US$2.7 billion) last month, largely because of increased housing mortgage loans.

In a report on financial market trends in July published on August 13, the Bank of Korea announced that the balance of Korean banks regarding the household loans was 532.2 trillion won (US$519.9 billion) as of the end of last month, a 2.8 trillion won increase from the previous month.

The monthly increase is 1 trillion won (US$976 million) higher than last year and the year before that, but decreased compared to the previous month (3.1 trillion won, US$3.0 billion).

At the end of July, housing mortgage loans increased by 2.6 trillion won (US$2.5 billion) to 380.7 trillion won (US$371.9 billion), compared to June. A monthly increase in housing mortgage loans continued to jump over 2.5 trillion won (US$2.4 billion) in two consecutive months. This might be affected by a revival of house transactions.

Han Seung-chul, senior manager at the Financial Market Team of the Bank of Korea, explained, “The number of house transactions increased a bit, and housing mortgage loans based on fixed interest rates greatly increased. Household loans, after subtracting the mortgage loan transfer amount in July, were 3.1 trillion won [US$3.0 billion].”

On the other hand, other debts (150.7 trillion won, US$147.2 billion), including negative accounts, also increased by 300 billion won (US$293 million).