Home-backed loans extended by South Korean banks gained at the fastest clip in five years in August, industry data showed Wednesday, due to increased home transactions and a rise in apartment prices.
  

Outstanding mortgage loans by the country's six major commercial banks, including Kookmin and KEB Hana, reached 327.9 trillion won ($278 billion) as of end-August, up 6.4 trillion won from the previous month, according to the data.
  

The monthly gain marks the sharpest rise for the month of August since relevant data was compiled in 2010.
  

The August reading marks a 39.6 percent spike from the same month last year, when Seoul began to ease ceilings on household lending to spur the property market.
  

The government eased the loan-to-value and debt-to-income ratios in August 2014, which enabled potential homebuyers to borrow up to 70 percent of their property value and 60 percent of their income for mortgage payments.
  

The central bank also changed its policy efforts to bolster growth through four rounds of rate cuts that sent the key interest rate to a record low of 1.5 percent.
  

Market watchers expected outstanding household loans to continue moving higher through the year.
  

"Property transactions tend to pick up in autumn compared with summer. Since home-backed transactions tend to move in sync with other property deals, it seems that loans will also continue to rise," said Park Won-gap, a property analyst at Kookmin Bank.
  

Property transactions totaled 721,471 cases in the January-July period, surging 31 percent from the previous year, according to the data by the land ministry. (Yonhap)