Nearly 100 trillion won ($87.9 billion) in household debt owed to banks will come due this year, sparking jitters over a surge in defaults amid a worsening housing market and a global economic downturn, sources said Thursday.

Local households will be required to pay back 98 trillion won in bank loans this year, with home-backed loans taking up the bulk of the total, or 79.5 trillion won, according to the Financial Services Commission.

Of the total mortgage loans, about 60 trillion won should be repaid at maturity and cannot be rolled over, the financial regulator said.

The large amount of maturing home-backed loans is raising the specter of defaults due to a stubbornly sluggish housing market and households’ worsening ability to repay their liabilities.

The local housing market has long been in the doldrums, making it almost impossible for mortgage borrowers to sell their homes to repay bank loans, according to market sources.

The index for measuring households’ repayment capability hit the lowest level in nine years for the current quarter, battered by a prolonged economic slump.

The FSC, however, played down the possibility of massive loan defaults, saying that household borrowers may roll over the bulk of their loans amid a slowdown in bank lending to households.

“But we are paying close attention in case the housing market slips into a deeper slump, sending home prices into a tailspin,” an FSC official said.

Large household debt has been the constant bugbear of South Korean policymakers. According to government data, the combined amount of household debts, excluding credit-based loans, reached 857.8 trillion won as of end-March this year. (Yonhap News)