Household borrowing at South Korea's five largest banks rose again in October, ending a one-month pause even though the Bank of Korea has lifted its policy rate twice this year. Outstanding household loans at KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank and NH Nonghyup Bank reached 783.6 trillion won ($584 billion) at the end of October, up 2.77 trillion won from September, according to data compiled by the banks and reported by Yonhap on Nov. 2.

The figures matter for anyone holding a Korean mortgage or credit line, and for investors watching the country's household debt. Higher rates and lending caps were supposed to slow borrowing. In October, at the big banks, they did not.

Mortgages up for a seventh month, credit loans return

Mortgage loans at the five lenders rose 1.7 trillion won to 623.99 trillion won, their seventh straight monthly increase, Yonhap reported. Credit loans rose 669 billion won to 108.89 trillion won. That reversed a 1.34 trillion won drop in September.

The October gain followed the first monthly decline in six months. In early September, the same five banks reported household loans of 781.39 trillion won, down 727.6 billion won from the end of August, Yonhap reported at the time. Banks had kept their own restrictions on new lending in place even after the government relaxed its cap on household loans, according to industry officials quoted in that report. The five lenders were said to have received larger quotas from regulators, lifting their combined annual target for household loan growth to 7.1 trillion won this year from 4.3 trillion won in 2025.

A bank official told Yonhap in September that mortgage growth was "highly likely to regain momentum" once group lending for new apartment projects resumed. October's data point in that direction.

What the regulators said about September

The broader picture for September was weaker. The Financial Services Commission said on Oct. 15 that household loans across all financial sectors fell 2.2 trillion won in September, preliminary data showed. It was the first net decline this year and the first since December 2025.

Home-backed mortgage loans across all lenders still rose 3.3 trillion won, down from 4.3 trillion won in August. Other loans, including credit loans, fell 5.5 trillion won. Within the banking sector, household loans rose just 0.6 trillion won, compared with 3.5 trillion won the month before. Nonbank lenders cut household loans by 2.8 trillion won, with insurers, specialized credit finance companies, mutual finance businesses and savings banks all lending less.

The regulator put the drop down mostly to seasonal factors: fewer housing deals, bad debt write-offs at quarter end and holiday bonuses that let households pay down debt. It said the annual growth target for household debt had been raised to 3.0% from 1.5%, and that lenders had been told to manage group loans for new apartment subscriptions separately, so a year-end credit crunch looked unlikely. It also warned that house prices and credit loans could rise in the coming months and said it would stay vigilant.

Expanded housing loan support for young adults, particularly newlyweds, took effect on Oct. 19, the FSC said, as part of the government's housing supply plan.

Rates are higher, but borrowing continues

The Bank of Korea held its base rate at 3% in October after raising it at its July and August meetings. The central bank described those hikes as "preemptive action" against inflation pressure, and cited prolonged tension in the Middle East and strong exports when it paused, according to Yonhap.

October's figures show that, at the largest banks, mortgage balances kept growing through both hikes and the pause.

Lenders outside the big five are taking a different route. Kakao Bank, the internet-only lender, said on Nov. 4 that it kept household lending in check in the third quarter and grew loans to individual business owners instead. Those loans rose 349 billion won in the quarter to 4.04 trillion won and accounted for 58% of its net loan growth this year, the Korea Herald reported. Savers kept bringing money in: Kakao Bank's deposits rose 4.7 trillion won in the quarter to 71.8 trillion won, the first time they topped 70 trillion won. Its delinquency ratio eased 0.02 percentage point from the previous quarter to 0.49%.

The FSC's October figures for household loans across all lenders, which will show whether nonbanks kept shrinking their books, are the next data point. Its September report came out on Oct. 15.