Household loans extended by domestic banks rose by six-point-five trillion won, or around four-point-seven billion U.S. dollars, last month, the largest increase since last August, driven by a rise in housing transactions and surging home prices.
 
According to data from the Financial Services Commission(FSC) on Wednesday, the rise in banks' outstanding household loans in June was the second largest on record after nine-point-eight trillion won posted in August 2024.

Home-backed loans accounted for the bulk of the gain, rising by six-point-two trillion won, while other types of loans, including credit loans, increased by 300 billion won, slowing from the previous month's gain of 400 billion won.

In the wake of the rising household debt tied to the housing market, the government capped mortgages at 600 million won for home purchases in the capital region, while prohibiting home-backed loans for multiple-homeowners.

However, the FSC forecast that loan growth will likely continue for another one to two months, taking into account already completed sales contracts and approved loan applications.