Household Loans in Financial Sector Increase by 10.1 Trillion Won in June... Surge in Mortgage Loans Impact

Other Loans Including Personal Loans Also Increase by Over 3.7 Trillion Won

[Asia Economy Reporter Jin-ho Kim] Due to an increase in housing transactions last month, the overall household loan growth across all financial sectors surged significantly compared to the previous month.

According to the 'Household Loan Trends for June 2021' released by the Financial Services Commission on the 14th, household loans across all financial sectors increased by 10.1 trillion KRW last month.

The increase in household loans was largely influenced by mortgage loans. Mortgage loans rose by 6.3 trillion KRW last month, an increase of 1.8 trillion KRW compared to the previous month (4.5 trillion KRW). The Financial Services Commission attributed this to active housing transactions in the first half of the year and the execution of pre-approved group loans.

Other loans, including unsecured loans, which had sharply decreased due to the refund of subscription deposits for SKIET public offering in May, also increased again. Other loans increased by 3.7 trillion KRW last month.

By sector, bank household loans increased by 6.3 trillion KRW last month. Household loans in the secondary financial sector also rose by 3.8 trillion KRW. Mortgage and non-mortgage loans from mutual finance, as well as unsecured loans from savings banks and credit card companies, increased significantly.

The Financial Services Commission evaluated that the cumulative household loan growth in the first half of this year has somewhat eased compared to the rapid surge since the second half of last year. However, it diagnosed that demand for housing-purpose loans continues due to high housing prices and active housing transactions, and demand for unsecured loans for living expenses and investment purposes remains high.

According to the Financial Services Commission, the number of nationwide housing sales transactions from January to May this year reached 470,000, nearly double compared to 259,000 in 2019.

A Financial Services Commission official stated, "We will continue to maintain vigilance and make every effort to ensure stable household debt management, including the thorough implementation of the household debt management measures announced on the 1st."