Mortgage loans in South Korea posted the largest increase in 2015 due to record-low borrowing costs and eased regulations on mortgage financing, financial watchdog data showed Thursday.
Home-backed loans extended by banks reached 400.8 trillion won (332 billion U.S. dollars) as of the end of 2015, up 36.7 trillion won from a year earlier, according to the Financial Supervisory Service (FSS). Including the mortgage loans securitized into mortgage-backed securities (MBS), outstanding mortgage came to 476.6 trillion won as of end-2015, up 70.6 trillion won from the previous year. The 70.6 trillion-won increase marked the biggest yearly growth in the country's history. The rises in home-backed loans in 2012, 2013 and 2014 were 21.6 trillion won, 22 trillion won and 37.2 trillion won respectively.
The fastest gain came as the record-low interest rates and easier rules for borrowing to purchase homes boosted demand for home purchase in loans. The Bank of Korea (BOK) cut its benchmark interest rate by 25 basis points twice in 2015 to an all-time low of 1.5 percent. The government eased regulations on borrowing home-backed loans to shore up the lackluster housing market. Household loans by banks reached 562.8 trillion won as of end-2015, up 44.6 trillion won from a year earlier. Corporate loans increased 50.2 trillion won from the previous year to 755.9 trillion won at the end of 2015.
Latest comments