South Korea's major lenders saw their home-backed loans rise sharply last month amid the record-low borrowing costs and a boom in the local housing market, industry data showed Sunday.
The outstanding amount of mortgage loans extended by five commercial banks -- Kookmin Bank, Shinhan Bank, Woori Bank, KEB Hana Bank and Nonghyup Bank -- reached 364.15 trillion won ($317.2 billion) as of end-June, up 4.84 trillion won from a month earlier, according to the data.
The on-month gain marked the fastest gain in the first six months of 2016, outpacing the previous yearly high of 3.5 trillion won increase tallied in May.
Mounting household credit has been regarded as one of the biggest threats to the South Korean economy as the increase in South Koreans' income or ability to pay back has been affected by slower than expected economic growth.
Total household borrowing given out by banks and non-bank institutions reached a record high of 1,223.7 trillion won at the end of the first half, spiking 11.4 percent from the same period last year.
The sharp increase in borrowing was attributed to interest rates that have been strategically kept at record low levels since June 2015 to help bolster growth in Asia's fourth-largest economy.
The Bank of Korea had maintained its key interest rate at a record low of 1.5 percent for 12 consecutive months before again sending it pushing it down further to 1.25 percent earlier this month.
At the same time, the government has tightened regulations on fresh loans to control the fast-rising home-backed loans.
However, experts noted that the recent sharp pace in home-back loans is attributable to rising demand for collective mortgage loans extended to those who buy newly-built apartments. Such collective lending is not subject to the government's new loan-tightening guideline.
According to separate data, transactions of apartments in the capital city of Seoul reached 11,739 cases, the highest monthly figure of any result tallied for June. (Yonhap)
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