November 28, 2023 11:32
The average monthly interest payments shouldered by each Korean household have surged 56 percent compared to four years ago as Koreans took out a flurry of housing loans.
Monthly interest payments rose from W80,000 per household in 2019 to a record W128,000 this year, according to Statistics Korea (US$1=W1,304).
The main reason was the surge in interest rates. Average quarterly interest payments have been rising in the double digits for five straight quarters, surging 42.8 percent and 42.4 percent on-year in the first and second quarters this year, although the increase rate slowed to 24.2 percent in the third quarter.
But many households took out new loans as the housing market started to recover.
According to the Bank of Korea, total household loans stood at W1.76 quadrillion in September, up 0.7 percent from June and a record high. But non-housing loans actually decreased by W5.5 trillion to W710 trillion while housing loans soared 1.7 percent to W1.05 quadrillion.
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