Household loans again rise in Oct. to record high despite tightened rules, higher rates

SEOUL, Nov. 11 (Yonhap) -- Household loans by banks again rebounded in October from a month earlier despite tight borrowing regulations and higher rates, data showed Wednesday.

Outstanding household loans extended by banks stood at a record high of 1,203.9 trillion won (US$901 billion) as of end-October, up 5 trillion won from the previous month, according to data from the Bank of Korea.

The rebound came a month after such loans fell for the first time in six months.

The rise in household loans by banks was mainly attributed to a rise in both mortgage and credit loans.

Mortgage loans rose for the seventh consecutive month in October, increasing 2.9 trillion won to 958.7 trillion won at the end of last month, according to the data.

Credit loans also advanced 1.7 trillion won to 244.3 trillion won over the cited period, following the previous month's 1.34 trillion-won fall.

Household loans extended by all financial institutions also rose 6.4 trillion won, shifting from the previous month's drop of 2.2 trillion won.

The Bank of Korea (BOK) kept its benchmark interest rate unchanged last month at 3 percent after two consecutive rate hikes to give the central bank time to assess economic conditions amid prolonged tensions in the Middle East and robust exports.

The rate freeze came after the BOK raised the benchmark rate in its July and August meetings, citing "preemptive action" to curb mounting inflationary pressure and ensure macroeconomic stability.