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Household debt growth slows in 2017 on tougher regulations

All News 14:19 January 10, 2018

SEOUL, Jan. 10 (Yonhap) -- South Korea's household debt growth slowed last year due to tighter mortgage rules meant to cool housing prices, data showed Wednesday.

Household lending by all financial institutions grew by 90.3 trillion won (US$84.3 billion) last year, down from 123.4 trillion won in 2016, according to data from the Financial Services Commission (FSC).

In December alone, household lending grew by 5.9 trillion won, compared with an expansion of 9.2 trillion won in the same month in 2016.

Outstanding household loans from banks came to 766.8 trillion won as of the end of December last year, according to data by the Bank of Korea (BOK), a 58.8 trillion-won increase from a year earlier.

Mortgages climbed 37.1 trillion won on year to 570.1 trillion won last year, due to a steady rise in home transactions.

BOK said other bank loans, including lending through an overdraft line of credit, gained a record 21.6 trillion won on year, rising to 195.8 trillion won, due to a rise in demand for loans from two Internet-only banks.

The government has intensified measures to tighten mortgage rules for owners of multiple homes as part of efforts to prevent mounting household debt from harming the economy.

Total household debt reached a record 1,419 trillion won in September last year.

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