The amount of personal credit loans grew while mortgage loans fell last month, data showed Tuesday, apparently due to the South Korean government’s tighter mortgage restrictions since last year.

Outstanding credit loans stood at 110.9 trillion won, up 1.2 trillion won ($1 billion) last month from 109.7 trillion won in January. The nation saw the figure drop 225 billion won on-month in the first month this year.

Meanwhile, mortgages owed by Korean households increased 956.3 billion won ($803 million) on-month in February to 439.6 trillion won, compared to a 1.26 trillion won increase in January, according to data collected from five commercial banks -- KB Kookmin Bank, Shinhan Bank, Woori Bank, Hana Bank, and NH Bank. It was the first time since January 2018 that the monthly increase has dropped below the 1 trillion mark.

The overall household debt, however, grew by 1.9 trillion won from the previous month to 613.3 trillion won in February. The increased portion last month is three times higher than a month-on-month increase of 638.8 billion won in January.

The main culprit behind the surging household debt is that people who have been blocked from borrowing money through mortgage products, due to the government’s tougher property regulations implemented in December, have increasingly chosen to take out credit loans instead.

On Dec. 16, the government banned mortgage loans for homes valued at over 1.5 billion won while reducing the loan-to-value ratio, which determines a maximum amount of loans allowed for an individual compared to a property value -- from 40 percent to 20 percent for homes worth between 900 million and 1.5 billion won.

“The decline in mortgage demand and increase in credit loans can be viewed from two different perspectives,” said an official from a commercial bank, adding “Individuals took out credit loans to make up for a shortage of funds caused by the tightened LTV rules to buy new homes, or they used credit loans for living expenses amid the sluggish economy.”

By Kim Young-won (wone0102@heraldcorp.com)