South Korea’s household loans extended by financial institutions are expected to surpass the 1 quadrillion won ($942.6 billion) mark this year, data showed Sunday.

Outstanding household loans by financial institutions, including commercial lenders, insurers and financial agencies stood at 982.5 trillion won as of the end of the second quarter, according to data from the Bank of Korea. As of end-August, household loans reached 993 trillion won.

If the trend keeps up, the country’s household loans are widely expected to pass the mark this year, market watchers said.

In its report recently submitted to the National Assembly, the central bank cited soaring mortgages as the reason for increased household loans.

Another factor in the increase in household loans is lower household income, according to observers.

“Due to the economic downturn, more people use mortgage loans to help out their income than to buy houses,” said Lee Jun-hyup, a researcher at the Hyundai Research Institute, a local economic think tank.

South Koreans’ real wages expanded at the slowest pace in more than two years in the second quarter, according to data from the central bank and the labor ministry. (Yonhap)