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

Apartment complexes in Seoul’s Gangnam District, July 13 / Yonhap

Household loans by major banks rose sharply in July despite tight borrowing regulations, as mortgage and credit loans picked up, financial data showed Sunday.

Outstanding household loans at five major lenders — KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH Nonghyup Bank — stood at 778.8 trillion won ($538.6 billion) as of Thursday, up 3.8 trillion won from the previous month, according to data compiled by the banks.

The rise in household loans by banks was mainly attributed to a gain in mortgage loans, which increased 2.3 trillion won to 617.4 trillion won in July from a month earlier, marking the sharpest on-month gain since August last year.

Experts said demand for borrowing remained strong amid surging housing prices in Seoul and parts of the greater metropolitan area.

At the same time, outstanding credit loans totaled 110 trillion won as of Thursday, up 1.4 trillion won from 108.7 trillion won at the end of June.

The July balance marked the largest since March 2023, when it stood at 111.2 trillion won.

The increase in credit was driven largely by overdraft, as investors borrowed more short-term funds to hunt for bargains as the stock market suffered a sharp drop in the last week of July.