South Korean Household Lending Slows to Six-Month Low

The Bank of Korea reported on October 15 that household bank lending expanded at its slowest pace in six months during September. Loans increased by 600 billion won, or approximately 444 million dollars, bringing the total household debt to 1,198.9 trillion won.

This deceleration resulted from a sharp decline across various loan types and a significant softening in mortgage growth. Mortgages rose by 2.9 trillion won, marking the lowest increase since April. Officials attribute the mortgage slowdown to a decrease in newly available homes for occupancy and a continued decline in jeonse, the traditional deposit-based rental transactions common in South Korea.

The borrowing trend emerges just before a scheduled central bank policy decision next week.