S. Korea's household debts rise 6.6 pct in 2014

Household debts in South Korea rose 6.6 percent last year on low interest rates and easing regulations on mortgage financing, central bank data showed on Thursday.

Household credit, which includes mortgage and credit loans as well as purchase on credit, came to 1,089 trillion won (about 1 trillion U.S. dollars) as of the end of 2014, up 6.6 percent, or 67.6 trillion won, from a year earlier, according to the Bank of Korea.

Given the country's estimated total population of 50.62 million in 2014, per-capita debts reached 21.5 million won.

The massive debts came as the central bank cut its policy rate in August and October 2014 to a record low of 2 percent. The financial regulator eased regulations on mortgage financing by reducing the debt-to-income and loan-to-value ratios.

Caused by the record-low rate, the household debts increased 29. 8 trillion won in the fourth quarter of 2014, the largest quarterly expansion in the country's history.

Home-backed loans led the household credit increase. Mortgage loans owed by households to banks expanded 36.7 trillion won last year.

Non-bank financial institutions, including savings banks, credit unions, community credit cooperatives and mutual finance companies, lent 20.1 trillion won to households. Among them, home- backed loans took up 28.9 percent of the total, or 5.8 trillion won.

Purchase on credit, which gauges credit card settlement to be paid, was 59.6 trillion won as of end-2014, up 1.2 trillion won from a year earlier. Endi