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S. Korea's mortgage loans expected to increase in Q2

Xinhua, April 2, 2015 Adjust font size:

Mortgage loans among South Korean banks are expected to keep an upward trend in the second quarter amid low interest rates, a central bank survey showed Thursday.

The index for household home-backed loan demand for the second quarter was 28, marking an identical figure with the first quarter, according to the Bank of Korea (BOK).

The index was based on a poll of officials in charge of lending at 16 local banks. The second-quarter number was the fourth- highest since the bank began compiling the data in 2002.

The bankers in charge of lending cited low interest rates, growing home transactions and higher home rent prices as their expectations for higher mortgage loans in the second quarter.

The BOK lowered its policy rate by a quarter percentage point in March to an all-time low of 1.75 percent. The financial regulator eased regulations on mortgage financing last year.

Demand for credit loans from households are expected to increase in the second quarter amid low interest rates.

Credit risks for household loans are expected to decline in the second quarter as low interest rates would reduce debt-servicing burden.

On March 24, the financial regulator unveiled a policy to help household borrowers transfer from floating-rate, lump-sum payment loans to lower fixed-rate, installment payment loans, contributing to the easing of credit risks. Endi