Data from the Bank of Korea reveals a sharp slowdown in household lending, signaling cooling trends ahead of next week's interest rate decision.
智通财经2026/10/15 03:36- The growth of household loans in South Korea slowed in September, reaching the lowest pace in six months. This was mainly due to a slowdown in mortgage growth and a significant decrease in other types of household loans, which restrained borrowing activity, as the central bank prepares to make a policy decision next week.
- Data released by the Bank of Korea on Thursday showed that household loans increased by 600 billion KRW (approximately 444 million USD), reaching 1.1989 quadrillion KRW, marking the smallest increase since March.
- Mortgage loans grew by 2.9 trillion KRW, the lowest level since April, due to a continued slowdown in deposit-based lease transactions in South Korea and a reduction in the number of newly completed homes available for occupancy.
- Other household loans, including unsecured loans and stock-backed loans, decreased by 2.3 trillion KRW, a decline that widened compared to the 600 billion KRW drop in August.
- The Bank of Korea pointed out that the larger decline was mainly attributable to reduced retail stock investment, a sales slump at the end of the quarter, write-offs of non-performing loans, and seasonal inflows of holiday bonuses.
- The slowdown in household loan growth comes as the central bank is about to make a policy decision, and the cooling of borrowing activity provides policymakers with reference material to assess the impact of previous rate hikes on households and borrowing behavior.
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