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Household debt growth slows down in January: BOK

All News 12:00 February 09, 2017

SEOUL, Feb. 9 (Yonhap) -- South Korean banks' household loans increased at a modest pace last month on interest rate hikes and less trade in the housing sector, the central bank said Thursday.

Loans extended to households here rose 100 billion won (US$87.1 million) in January, far less than the 3.4 trillion won recorded a month earlier, according to the Bank of Korea (BOK).

Mortgage loans grew 800 billion won during the month to 533.7 trillion won, while unsecured loans based on borrowers' credit qualifications decreased by 700 billion won to 173.5 trillion won.

The central bank cited a "seasonal factor" among the reasons for the marked slowdown in household debt growth.

"The growth size of mortgage loans contracted due to less trade in the housing sector in the off-peak season and interest rate hikes," it said.

A scene of a mortgage loan service team at a Seoul bank in an undated file photo. (Yonhap)

The number of apartments traded in Seoul fell to around 5,000 in January from 9,000 in December and 11,000 in November, the BOK noted.

On the other hand, interest rates for mortgage loans from banks climbed to 3.13 percent in December from 3.04 percent in November and 2.89 percent in October.

Credit line loans, known as "minus loans," dwindled partly because corporate employees paid off some of their debts with year-end bonuses, the BOK said.


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