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Home-backed loans up over 34% in February on rising housing demand

Published: 09 Mar. 2025, 14:49

This March 9 photo shows an apartment complex in southern Seoul.

Home-backed loans extended by major Korean banks climbed more than 34 percent from a month earlier in February, indicating a possible rebound in the housing market, data showed Sunday.

Fresh home-backed loans extended by the five major lenders — KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup — reached 7.5 trillion won ($5.17 billion) last month, up 34.3 percent from a month before, according to the data from the banks.

The reading marks the highest since September, when the five banks extended 9.2 trillion won worth of home-backed loans.

It also marked the steepest rate of on-month rise since April, when such loans advanced 34.8 percent.

Market observers believe housing loans are expected to increase further in the coming months as the Seoul city government recently eased regulations on land transactions in the city, pushing up real estate demand.

The decrease in borrowing costs sparked by the Bank of Korea's recent rate cuts will also likely boost demand for mortgages, they said.

The central bank slashed its key rate to 2.75 percent late last month, following back-to-back rate reductions in October and November, highlighting the need to support growth.

Yonhap