Household Loans in the Financial Sector Increased by 3.5 Trillion Won in June... Rising for 3 Consecutive Months

"Household Loan Growth Trend Not at Overheating Level"

Household loans across the entire financial sector increased for the third consecutive month in June.

The Financial Services Commission announced on the 12th that household loans across the entire financial sector increased by 3.5 trillion KRW last month. Although this is a 1.2% decrease compared to the same month last year, the upward trend has continued for three consecutive months following April (200 billion KRW) and May (2.8 trillion KRW).

[Image source=Yonhap News]

By loan category, the outstanding balance of mortgage loans increased by 6.4 trillion KRW, marking a rise for four consecutive months. Other loans decreased by a total of 2.9 trillion KRW as both primary and secondary financial institutions saw reductions.

By financial sector, household loans in the banking sector increased by 5.9 trillion KRW, maintaining an upward trend for three consecutive months. Mortgage loans increased by 7 trillion KRW in total, including general individual mortgage loans (3.7 trillion KRW), policy mortgages (2.6 trillion KRW), jeonse loans (100 billion KRW), and group loans (70 billion KRW). Other loans decreased by 1.1 trillion KRW due to a 900 billion KRW reduction in unsecured loans.

The authorities cited the expansion of the special Bogeumjari Loan supply and an increase in mortgage loans for home purchases driven by a recovery in housing transactions centered on preferred locations as reasons for the rise in banking sector mortgage loans from 4.2 trillion KRW in May to 7 trillion KRW last month.

Regarding this, the authorities explained, "Housing transaction volumes are still below the usual levels, and a significant portion of mortgage loans are for purposes other than home purchases, such as returning jeonse deposits and securing living expenses due to the normalization of mortgage loan regulations." They added, "We judge that the increase in household loans is not at a level that raises concerns about overheating caused by speculative demand in the housing market."

In the secondary financial sector, household loans in insurance increased by 100 billion KRW, but mutual finance (decreased by 1.8 trillion KRW), savings banks (decreased by 100 billion KRW), and specialized credit finance companies (decreased by 700 billion KRW) led to a total decrease of 2.4 trillion KRW. The reasons for the renewed increase in the decrease of household loans in the secondary financial sector include a reduction in non-mortgage loans in mutual finance (decreased by 1.2 trillion KRW) and a shift to a declining trend in household loans from credit card companies.

The authorities stated, "We will continue to closely monitor the increase in household loans and take necessary measures to manage household loans stably if needed."

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