Korea's household loan growth slows to seven-month low in September

Household loans extended by banks increased the least in seven months in September amid tighter lending regulations and higher interest rates, central bank data showed Thursday.

Outstanding household loans extended by banks stood at 1,198.9 trillion won ($895.5 billion) last month, up 0.6 trillion won from the previous month, slowing from the previous month's 3.5 trillion-won rise, according to data from the Bank of Korea.

The September gain marks the smallest since March this year when such loans rose by 0.5 trillion won.

Outstanding mortgage loans increased by 2.9 trillion won on month in September to 955.5 trillion won.

Other household loans, in contrast, fell by 2.3 trillion won to 242.6 trillion won.

The central bank raised the benchmark interest rate to 3 percent over two straight meetings in July and August, marking the first back-to-back rate hikes since January 2023, when it raised the rate at seven consecutive meetings starting in April 2022.

Meanwhile, household loans by all financial institutions fell by 2.2 trillion won in September from the previous month, the first month-on-month dip since December last year, when loans to households declined 1.2 trillion won, according to separate data from the Financial Services Commission.

Yonhap