Household Loans Decrease by 200 Billion Won in October... Mortgage Loans Up, Credit Loans Down

[Asia Economy Reporter Song Hwajeong] It has been revealed that the decline in household loans continued last month as well.

According to the 'Household Loan Trends in October 2022' announced by the Financial Services Commission on the 9th, household loans across all financial sectors decreased by 200 billion KRW last month. The year-on-year growth rate was 0.2%, maintaining the slowdown trend since the second half of last year.

Although the decline in household loans continued, the decrease narrowed as the increase in mortgage loans expanded compared to the previous month and the decrease in other loans reduced. Last month, mortgage loans increased by 2 trillion KRW in October, slightly expanding from 1.9 trillion KRW in the previous month, mainly due to group loans. Other loans, such as credit loans, decreased by 2.2 trillion KRW in October, narrowing the decrease compared to the previous month (-3.1 trillion KRW).

By financial sector, household loans in the secondary financial sector increased, but household loans in the banking sector maintained a decline, resulting in an overall decrease in household loans. Last month, household loans in the banking sector decreased by 600 billion KRW. Mortgage loans increased by 1.3 trillion KRW, centered on policy mortgages (1 trillion KRW) and group loans (700 billion KRW), expanding the increase compared to the previous month (900 billion KRW). On the other hand, other loans, mainly credit loans, decreased by 1.9 trillion KRW, narrowing the decrease compared to the previous month (-2.1 trillion KRW). In the secondary financial sector, mutual finance and credit finance companies decreased, while insurance and savings banks increased by 400 billion KRW.

A Financial Services Commission official explained, "Although the handling of jeonse deposit loans slightly decreased, the increase expanded compared to the previous month due to continued funding demand related to group loans," and added, "Other loans such as credit loans decreased due to rising loan interest rates, but the decrease narrowed."