Published : 2013-03-03 11:25
Updated : 2013-03-03 11:25
The portion of South Korean banks' household loans with fixed rates surpassed the 20 percent level in January on the regulator's push for a soft landing of household debt problems, data showed Sunday.
Local banks' household loans with fixed rates accounted for 21.8 percent out of outstanding home lending in January, up from 9.5 percent a year earlier, according to data by the central bank.
It marked the first time that the weight of such lending surpassed the 20 percent level, it showed.
The financial regulator has been urging local banks to extend home loans with fixed lending rates as part of its drive to mend banks' lending practices.
The bulk of banks' mortgage loans are extended with floating lending rates, making households more exposed to higher debt-serving burdens if market rates rise.
But out of banks' fresh household lending extended on a monthly basis, the portion of fixed-rated loans declined to 36.5 percent in January, marking the second straight month of falls, according to the data.
Market watchers said that prospects that the Bank of Korea may cut the benchmark rate in the first quarter led households to refrain from getting household loans with fixed rates.
South Korea's household credit totaled a record high of 959.4 trillion won ($885.9 billion) as of end-December. Korean households' high indebtedness is cited as the main bugbear for policymakers as it is feared to crimp consumer spending, hurting economic growth. (Yonhap News)