Seoul:Household loans extended by banks in September saw their slowest growth in seven months due to tightened lending regulations and increased interest rates, as revealed by central bank data.
According to Yonhap News Agency, outstanding household loans from banks reached 1,198.9 trillion won (approximately US$895.5 billion) last month, marking an increase of 0.6 trillion won from the previous month. This rise was notably slower than the 3.5 trillion-won increase observed in August, making September's growth the smallest since March 2023, when loans grew by just 0.5 trillion won.
Mortgage loans increased by 2.9 trillion won on a monthly basis in September to total 955.5 trillion won. In contrast, other types of household loans decreased by 2.3 trillion won, bringing the total to 242.6 trillion won.
The central bank had raised the benchmark interest rate to 3 percent during consecutive meetings in July and August, marking the first successive rate hikes since January 2023. This follows a series of interest rate increases that began in April 2022.
Additionally, data from the Financial Services Commission (FSC) indicated that household loans from all financial institutions declined by 2.2 trillion won in September compared to the previous month. This marked the first monthly decrease since December 2022, when household loans dropped by 1.2 trillion won.