Household credit rises most in Q3 despite high borrowing costs

▲ This file photo, taken Oct. 3, 2021, shows information on a bank's loan programs on the exterior of a lender in Seoul. South Korea's financial regulator is reviewing further tightening rules on household loans in a bid to curb the fast growth of household debt. (Yonhap)

household credit-Q3 tally

Household credit rises most in Q3 despite high borrowing costs

SEOUL, Nov. 21 (Yonhap) -- South Korea's household credit soared at a record-high pace in the third quarter of the year as home-backed loans increased sharply amid high borrowing costs, central bank data showed Tuesday.

Outstanding household credit reached 1,875.6 trillion won (US$1.46 trillion) at the end of September, up 14.3 trillion won from three months earlier, according to the preliminary data from the Bank of Korea (BOK).

The third-quarter rise marks the record-high gain, according to the data.

Household credit refers to credit purchases and loans to households by financial institutions.

The rise in household loans came despite high borrowing costs, driven by the BOK's series of interest rate hikes to bring inflation under control.

In January, the BOK raised its key interest rate by a quarter of a percentage point to 3.5 percent, the seventh consecutive increase since April last year.

But since then, the central bank has kept the rate unchanged amid slowing inflation and an economic slowdown.

Of the total, household loans stood at a record high of 1,759.1 trillion won at the end of September, up a record 11.7 trillion won from three months earlier.

Mortgage loans increased by a record high of 17.4 trillion won in the third quarter from three months ago, and other types of household loans also increased 2.6 trillion won over the cited period.

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