Household Loans Increased by 3.6 Trillion Won in October... The Cause of the Increase in Mortgage Loans

Increase in Mortgage Loans Despite Suspension of 50-Year Term Loans
'20s-30s, Apartments, and Medium-Sized Houses' Are the Causes of Mortgage Loan Growth

On the 23rd, as domestic market interest rates and bank loan interest rates rapidly rise, a banner displaying loan interest rates is hung on the exterior wall of a commercial bank in Seoul. Photo by Jinhyung Kang aymsdream@

Mortgage loans in October increased at the largest rate this year. Credit loans also saw a slight increase. As of the end of October, household loans at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) totaled 686.0119 trillion KRW, an increase of 3.6825 trillion KRW compared to the previous month.

Household loans have been rising for six consecutive months since May, with the October increase being the largest since May. A representative from a commercial bank said, "Even though banks have stopped selling mortgage loans with a 50-year maturity, debt continues to grow."

Not only mortgage loans but also credit loans increased. The outstanding balance of credit loans at the five major banks was 107.9424 trillion KRW as of the end of October, up about 600 billion KRW from the previous month.

Hana Financial Management Research Institute analyzed in its report "Trends in Market Fund Flows and Key Issues" that the increase in transactions was driven by "people in their 20s and 30s, apartments, and medium-sized houses." According to the Korea Real Estate Board, the number of housing sales transactions doubled from 25,761 in January this year to 51,578 in August.

Until January, the share of transactions by people in their 20s and 30s was 25.5% of the total, but it rose to 28.6% in August. The report predicted, "With the start of the special Bogeumjari Loan, the burden of raising funds eased, increasing the transaction share of people in their 20s and 30s, but as the general type of the special Bogeumjari product disappears, the transaction share of people in their 20s and 30s is likely to decrease in the future."

By housing type, since the first quarter of this year when the price decline of apartments deepened, low-price buying increased, causing the share of apartment transactions to surge (69.2% in January → 76.1% in August). Due to the price decline, the transaction share of medium-sized houses (61~100㎡) increased (41.4% → 44.3%) compared to small-sized houses (60㎡ or less).

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