SEOUL: Mortgage loans among South Korean banks are expected to maintain a record-breaking trend in the third quarter amid the record-low interest rate, a poll by the central bank showed Wednesday.
According to the Bank of Korea (BOK) survey of 16 banks, the mortgage demand index for household stayed at a relatively high level of 28 for the third quarter. It reflects the expected demand for home-backed loans during the quarter.
The third-quarter figure was lower than 31 in the prior quarter, but marked an identical number to the one in the first quarter when home-backed loans by banks increased 11.6 trillion won (10.4 billion U.S. dollars).
The first-quarter increase was larger than any other first- quarter numbers in the past as the record-low policy rate boosted demand for mortgage loans.
The BOK cut its benchmark interest rate below 2 percent in March for the first time in history after lowering it by 25 basis points in August and October last year each.
The central bank lowered the policy rate by a quarter percentage point to an all-time low of 1.6 percent in June, bolstering worries about the continued increase in mortgage loans.
The demand index for credit loans rose from 9 in the second quarter to 13 in the third quarter, heralding a rise in overall demand for loans.
