Household loans rise sharply in July on fast-growing mortgage, credit loans

Seoul, Aug. 2 (Yonhap) -- Major banks witnessed a significant surge in household loans during July, despite stringent borrowing regulations, with mortgage and credit loans taking the lead, financial data revealed on Sunday. The total outstanding household loans across five leading lenders - KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NH Nonghyup Bank - amounted to 778.8 trillion won (US$538.6 billion) as of Thursday, marking a 3.8 trillion won increase from the previous month.

The rise in household loans primarily stemmed from an 2.3 trillion won surge in mortgage loans, which stood at 617.4 trillion won in July, the steepest monthly gain since August of the prior year. Experts attributed the persistence in borrowing demand to the surging housing prices in Seoul and other metropolitan areas. Simultaneously, outstanding credit loans totaled 110 trillion won as of Thursday, a 1.4 trillion won increase from 108.7 trillion won at the end of June, the highest since March 2023.

The July balance surpassed its previous peak, driven largely by overdrafts, as investors borrowed more short-term funds in search of bargains amid the recent sharp decline in the stock market.