"Surge in Housing Transactions Reflected in Mortgages"... Household Loans Rise by 4.7 Trillion Won in August

Increase Significantly Exceeds Previous Month’s Growth (2.3 Trillion Won)
Bank Mortgage Loans Drive the Rise
Decline in Unsecured Loans Limited to 300 Billion Won

In August 2025, household loans across all financial sectors increased by 4.7 trillion won compared to the previous month. This is an increase of approximately 1 trillion won from the previous month. The rise was attributed to a larger increase in mortgage loans from banks, while the growth in other types of loans significantly slowed.

The Financial Services Commission announced on September 10 that it held a household debt review meeting with relevant ministries at the Government Complex Seoul to discuss future response measures.

In August, household loans across all financial sectors rose by 4.5 trillion won from the previous month, a significant jump compared to the 2.3 trillion won increase in the previous month. Both the banking sector and the secondary financial sector saw an expanded increase.

On the other hand, other loans decreased by 400 billion won, with the rate of decline narrowing compared to the previous month’s 1.9 trillion won decrease. This was mainly due to a reduced decline in unsecured loans, which shrank by 300 billion won in August compared to a 1.1 trillion won decrease in the previous month.

By sector, household loans from banks increased by 4.2 trillion won, a larger rise than the 2.8 trillion won increase in the previous month. Specifically, the increase in bank-originated mortgage loans expanded to 2.7 trillion won, up from 2.2 trillion won in the previous month. Policy loans maintained a similar increase to the previous month at 1.2 trillion won. Other loans, which had decreased by 600 billion won in the previous month, turned to an increase of 300 billion won in August.

In the secondary financial sector, household loans grew by 600 billion won, 100 billion won more than the previous month. Mutual finance institutions also saw their increase expand from 400 billion won to 1.2 trillion won, while savings banks shifted from a 300 billion won decrease to a 30 billion won increase.

The Financial Services Commission analyzed that, in addition to seasonal factors such as demand for moving during the new school term, the increase in housing transactions prior to August was reflected in mortgage loans with a time lag, leading to a somewhat larger rise in mortgage lending.

The commission also explained that the reduced decline in other loans, mainly unsecured loans, due to increased demand for funds during the holiday season, contributed to the overall expansion in household loan growth in August.

The financial authorities stated, "Uncertainties in household debt remain due to recent expectations of interest rate cuts and market sentiment anticipating rising housing prices. We will closely monitor market conditions until the growth in household loans stabilizes and will implement preemptive and immediate measures as needed."

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