January Household Loans Decrease by 8 Trillion Won... First Decline in Mortgage Loans Since Records Began

Financial Services Commission Announces 'Household Loan Trends in January'

Policy Mortgages Increased but
Bank Sector Jeonse Loans and Secondary Financial Sector Mortgage Loans Decreased

[Image source=Yonhap News]

[Asia Economy Reporter Sim Nayoung] Household loans in the financial sector decreased by 8 trillion KRW compared to the previous month in January this year. The Financial Services Commission announced this on the 9th in the 'Household Loan Trends in January' report.

In particular, mortgage loans decreased compared to the previous month for the first time since statistics began in 2015. Mortgage loans decreased by 600 billion KRW. The decline was mainly due to decreases in jeonse loans (-1.8 trillion KRW) and non-bank sector mortgage loans such as mutual finance (-600 billion KRW).

A Financial Services Commission official stated, "Looking into the reason why mortgage loans decreased by 600 billion KRW, although policy mortgages increased, the decrease in bank sector jeonse loans and second-tier financial sector mortgage loans caused the trend to turn downward for the first time since statistics began in 2015."

Regarding the 7.4 trillion KRW decrease in other loans including credit loans compared to the previous month, the official said it was due to "the impact of rising loan interest rates." When looking at credit loans alone, they decreased by 5.2 trillion KRW compared to the previous month.

Both the banking sector and the second-tier financial sector saw decreases in household loans. Household loans in the banking sector decreased by 4.6 trillion KRW. Savings bank household loans slightly increased by about 100 billion KRW compared to the previous month. On the other hand, mutual finance (-300 billion KRW) and credit card companies (-400 billion KRW) mainly contributed to a 3.4 trillion KRW decrease.