Household loans extended by South Korean financial institutions grew at a record pace in October as mortgage loans sharply rose, data showed Tuesday, following government measures to jolt the ailing property market.

Outstanding household lending by local lenders and non-banking institutions increased 7.8 trillion won (US$7 billion) in October from a month earlier to 730.6 trillion won, according to the Bank of Korea (BOK).

The October growth, compared with a 5.6 trillion won gain in the previous month, marks the biggest monthly increase since the BOK started compiling the data in October 2003.

Of the total, mortgage loans extended by financial institutions increased 5.4 trillion won to 450.5 trillion won, also growing at a record pace since December 2007. The central bank began compiling the mortgage loan data at a later period.

Banks' household loans increased by 6.4 trillion on-month to 508.3 trillion won, picking up from a 4.3 trillion gain logged the previous month. 

Household lending by non-banking institutions increased 1.4 trillion won over the month to 222.4 trillion won. The monthly gain is on par with the September growth.

The latest data comes on the heels of government policies aimed at propping up the property market by easing mortgage lending rules. In a supporting move, the central bank lowered the base rate by a quarter percentage point each in August and October.

The policy moves have spurred concerns they will further stoke the country's already sizable household debt that broke the 1,000 trillion won mark in the third quarter. (Yonhap)