Household Loans Increase by 6.3 Trillion Won in June... Mortgage Loans See Third Largest Rise Ever

Bank of Korea 'Financial Market Trends in June 2021'

[Image source=Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] In June, household loans continued to increase sharply, mainly driven by mortgage loans. Although household loans temporarily decreased compared to the previous month in May, household loans turned to an increasing trend again due to sustained housing demand.

According to the "Financial Market Trends in June 2021" released by the Bank of Korea on the 14th, bank household loans increased by 6.3 trillion KRW last month, reversing to an upward trend in just one month. In May, bank household loans had decreased by 1.6 trillion KRW.

In particular, mortgage loans increased by 5 trillion KRW, leading the rise in household loans. The Bank of Korea stated, "Bank household mortgage loans recorded the third-largest increase since the start of preliminary reports in 2004 based on June's increase amount." This is the largest increase since June 2015 (6.8 trillion KRW) and June 2020 (5.1 trillion KRW).

Demand for funds related to housing sales and jeonse (long-term lease) transactions continues, and with an increase in group loans, the growth in mortgage loans appears to have expanded compared to the previous month. According to the Bank of Korea, bank jeonse loan increases amounted to 2.2 trillion KRW last month.

Other loans also turned to an increase. As demand for housing and living expenses continued, other loans increased by 1.3 trillion KRW in June compared to the previous month.

Bank corporate loans maintained a strong increase in June, but the scale of growth slightly decreased compared to the previous month due to seasonal factors. Corporate loans increased by 5.1 trillion KRW in June, down from 5.7 trillion KRW in May. While loans to large corporations decreased by 1.1 trillion KRW as they temporarily repaid loans to manage debt ratios at the end of the quarter, loans to small and medium-sized enterprises increased by 6.1 trillion KRW, maintaining a strong growth trend.

This content was produced with the assistance of AI translation services.