South Korean commercial banks have sharply increased loans for jeonse, or deposit-based apartment leases, as the prices of jeonse are skyrocketing due to the shortage of supply of jeonse houses.

According to industry sources on Monday, the nation's top six banks-Kookmin, Shinhan, Woori, KEB Hana, Nonghyup and IBK-provided jeonse loans worth just over three-trillion-497 billion won in total in the first five months this year.

It marks a whopping 72 percent increase from the same period last year.

Unlike mortgage loans, jeonse loans do not require the immediate payment of principals and allow loan users to only pay interest over a certain time period, hence being more appealing to people looking for housing.

In addition, due to the demand for jeonse houses showing no signs of letting up and the Bank of Korea slashing its key interest rate this month, the number of jeonse loans are expected to continue growing.

According to Kookmin Bank, the average price of jeonse jumped by 16-point-seven percent over the past year from 172-point-56 million won in May last year to 201-point-36 million won last month.