Household debts are casting stormy clouds over the Korean economy as their size and pace of growth are reaching dangerous levels.

The Bank of Korea said that household credit hit a new record high and expanded at record pace in the fourth quarter of 2014, mainly due to a surge in household borrowing that capitalized on a relaxation of lending rules and rate cuts.

Household credit totaled 1,089 trillion won ($990 billion) as of end-December, up 29.8 trillion won from 1,059.2 trillion won from three months earlier. The fourth-quarter increase marks the sharpest quarterly gain since the central bank began compiling the data in 2004.

Bank officials said a surge in household debts pushed household credit ― which includes credit purchases and loans extended by financial institutions ― to a new record: Outstanding household loans reached 1,029 trillion won at the end of December, up 27.6 trillion won from the previous quarter.

A bigger cause for concern is that mortgages account for the lion’s share of household borrowing, and what’s more worrisome is that they are growing too rapidly.

Outstanding home-backed loans extended by seven major banks amounted to 319.9 trillion won as of the end of February, up 3.45 trillion won from the end of last year. The January-February growth was 8.2 times the increase of 423 billion won recorded during the same period a year earlier. It was the sharpest-ever rise for the first two months of a year.

A growth in household debt had been anticipated because the government eased rules on housing-related loans to revive the property market last year. The recent surge of outlays for “jeonse,”or home leases based on lump-sum deposits, also pushed many tenants to buy homes with borrowed money.

It would be good if home purchases by mortgage-backed borrowers resuscitated the property market and touched off a virtuous circle in the economy. But it would be disastrous if a higher U.S. interest rate forced us to raise rates or home prices fell.

As part of preventive measures, the government said that local lenders would provide about 20 trillion won worth of long-term fixed-rate loans this month to households who want to convert their short-term floating rate loans.

While better than nothing, this is only a stopgap measure. Officials should heed private economists who call for more active measures such as capping the total amount of household debt to slow the pace of its growth.