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S. Korea's household loans grow in January on mortgage demand

Xinhua, February 16, 2015 Adjust font size:

Household loans extended by banks in South Korea unexpectedly grew in January on strong demand for mortgage loans caused by brisk housing transactions, central bank data showed on Monday.

Debts owed by households to banks amounted to 562.3 trillion won (511.2 billion U.S. dollars) as of end-January, up 1.4 trillion won from a month earlier, according to the Bank of Korea.

Loan demand from households tended to fall in January when companies paid year-end bonuses and the housing market was seasonally weak.

Nationwide housing transactions soared 34.1 percent to 79,320 in January, logging the highest January figure since the data began to be compiled in 2006.

Outstanding home-backed loans reached 409.4 trillion won as of end-January, up 2.5 trillion won from a month ago.

The continued growth came as the financial regulator eased regulations on mortgage financing by lowering the loan-to-value and debt-to-income ratios. The central bank also cut the policy rate in August and October last year to a record low of 2 percent. Endi