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Household loan growth accelerates again in August despite tighter regulations

Published: 10 Sep. 2025, 14:16

Pedestrians walk by a banner advertising home mortgage loan products at a bank in Seoul on Sept. 7. [YONHAP]

Household loans extended by Korean banks grew at a faster pace in August compared to the previous month, driven by a recent increase in housing transactions despite government regulations, according to central bank data released on Wednesday.

Banks' outstanding household loans stood at 1,168.3 trillion won ($840.68 billion) as of the end of August, up 4.1 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).

The August tally marks an acceleration from a 2.7 trillion-won gain the previous month.

Home-backed loans rose by 3.9 trillion won to 930.3 trillion won in August, compared to a 3.4 trillion-won increase logged in July.

Unsecured and other types of household loans grew by 300 billion won to 237.1 trillion won, rebounding from a 600 billion-won decrease the previous month.

"Despite the continued effects of the lending regulations announced in June, the volume of mortgage loans for home purchases increased, as the rise in housing transactions in May and June was reflected with a time lag," BOK official Park Min-cheol told a press briefing.

Since late June, authorities have imposed a 600 million-won cap on mortgage loans for property purchases in the capital region and suspended home-backed loans for multi-homeowners in an effort to rein in soaring housing prices.

Housing transactions have surged in recent months, particularly in Seoul and surrounding metropolitan areas, as banks eased restrictions on household lending at the beginning of the year and the Seoul city government temporarily lifted its land transaction permit requirements.

"The recent rise in housing prices in Seoul was partly due to concerns over a supply shortage, so the government's recent announcement of supply measures is expected to somewhat help stabilize the housing market. The key is to implement them without delays," Park added.

Meanwhile, corporate loans went up by 8.4 trillion won from a month earlier in August, following a 3.4 trillion-won increase a month earlier.

Outstanding corporate loans totaled 1,354.8 trillion won as of the end of August, according to the data.

"Loans to large corporations rose significantly, from 500 billion won to 3.8 trillion won, due to rising demand for debt repayment and securing operating capital," the BOK said.

Yonhap