'Apartment Prices Surge': Bank Mortgage Loans Rise by 4 Trillion Won in August; Household Loans Near 1,200 Trillion Won at Record High

[Financial News] Mortgage loans rose by 4 trillion won last month as apartment prices and transaction volumes surged in Seoul and the Capital Metropolitan Area. The increase rebounded after briefly slowing in May. Although other loans, including credit loans, declined amid a slowdown in the stock market and tighter lending restrictions, household loans rose by more than 3 trillion won, approaching 1,200 trillion won. It was the largest amount ever recorded.
According to the August financial market trends released by the BOK on the 9th, mortgage loans stood at 952.5 trillion won last month, up 4 trillion won from the previous month. The increase returned to the 4-trillion-won range after reaching 4.3 trillion won in June.
Lee Seung-yuop, deputy director of the BOK's Market Operations Team, explained, "Mortgage loans have continued to grow at a relatively solid pace as housing transactions in the Capital Metropolitan Area increase and final-payment loans expand."
However, mortgage loans increased by a total of 17.3 trillion won from January through August this year, less than the 40.3 trillion won recorded during the same period in 2024 and the 27.7 trillion won recorded in 2025.
Jeonse loans also fell by 700 billion won last month, continuing their decline since September last year.
The decline is attributed to the government's tighter mortgage-loan regulations and restrictions on jeonse loans in response to soaring real estate prices.
Other loans, including credit loans, stood at 244.9 trillion won at the end of last month, down 600 billion won from the previous month and marking their first decline in four months. The decrease is attributed to slower individual stock investment and banks' strengthened management of credit loans. Other loans include overdraft loans, commercial-property-backed loans and stock-secured loans.
Household loans, including mortgage loans and other loans, stood at 1,198.3 trillion won at the end of last month, up 3.4 trillion won from the previous month. The household-loan balance was the largest ever recorded. However, the increase was smaller than the 5.5 trillion won rise recorded the previous month.
Corporate loans stood at 1,430.8 trillion won last month, up 9.7 trillion won from the previous month. They have continued to grow since January this year.
Loans to large companies stood at 329.2 trillion won, up 4.9 trillion won from the previous month.
Lee explained, "The increase was substantial as major banks strengthened their lending operations while companies' demand for funds to repay corporate bonds and for other purposes coincided."
Loans to small and medium-sized enterprises stood at 1,101.6 trillion won, up 4.8 trillion won from the previous month. The increase resulted from the government's expanded financial support policies for small and medium-sized enterprises.
Corporate bond holdings fell by 900 billion won last month, as net redemptions continued amid the burden of issuance caused by rising interest rates and the seasonal off-season.
Commercial paper and short-term bonds recorded net issuance of 4.1 trillion won last month, driven by demand from public enterprises for working capital and other needs.
Deposits at financial institutions increased slightly.
Bank deposits rose by 100 billion won last month to 2,592.6 trillion won.
On-demand deposits fell by 14 trillion won. The decline was driven by increased corporate withdrawals to pay corporate taxes, despite inflows of funds for local governments' fiscal spending.
Time deposits stood at 1,164 trillion won last month, up 20.3 trillion won from the previous month. The increase was substantial due to household funds shifting back into deposits and the temporary placement of local government funds.
Deposits at asset management companies increased by 23.5 trillion won, returning to growth. The increase was centered on equity funds. Bond funds fell by 300 billion won from the previous month as rising interest rates and other factors brought their growth to a halt.
[email protected] Jung Sang-gyun Reporter