Mortgage loans extended by South Korean financial firms grew by the largest amount in four years in December, as low borrowing costs and eased rules on home-backed lending spurred demand, data showed Thursday.
Home-backed loans handled by local financial institutions grew by 4.9 trillion won (US$4.36 billion) on-month to 379.3 trillion won in December, according to data by the Financial Supervisory Service.
The December growth marked the sharpest expansion since November 2006, when mortgage lending rose by 5.1 trillion won.
The sharp gain in home-backed loans came as borrowing costs remained low, despite the rapid growth of the economy and key rate increases in July and November.
The rise in mortgage loans, which account for the bulk of bank loans, was also attributed to eased regulations.
The growth of home-backed loans has sharply picked up since October last year, data showed. In November, such loans expanded 4.3 trillion won after growing by 3.5 trillion won in October.
Last year, the government tightened regulations for mortgage loans in a bid to ease a spike in home-backed lending, but as the local property market slumped, it decided in late August to temporarily ease mortgage lending and tax rules to bolster the tepid housing market. (Yonhap News)
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