Household loans extended by local lenders continued to grow at a fast clip last month, central bank data showed Wednesday, amid strong demand for homes partly helped by record low interest rates.

Outstanding household loans extended by local banks reached 615.8 trillion won ($536.13 billion) as of the end of September, up 6.3 trillion won from the previous month, according to the data from the Bank of Korea.

The monthly gain marks a slight slowdown from a 7.7 trillion won rise in August but a large increase from a 3.7 trillion won gain in the same month last year.

The increase was largely attributed to a rise in demand for mortgage loans.

"Home-backed loans grew 6 trillion won on low interest rates and robust property transactions," the BOK said in a press release.

In September, the number of home transactions slipped 0.6 percent on-year to 86,152, mainly due to the three-day Chuseok holiday, or Korean Thanksgiving, which reduced the number of working days available for home purchases.

Still, home transactions in the capital region, home to nearly half of the country's population of 50 million, gained 6.8 percent on-year to 45,932 in September, the land and transportation ministry said earlier.

Home-backed loans have steadily increased following a series of government measures aimed at revitalizing the property market, which included the easing of the loan-to-value and debt-to-income ratios last year.

In efforts to help spur growth, the central bank also delivered four rate cuts in just over a year since June 2014, sending its key rate to a record low of 1.5 percent.

Consequently, lending rates have dipped to the lowest levels since 2013 while the yield on state bonds with a three-year maturity came to 1.57 percent as of end-September, also the lowest level since 2013, according to the BOK.

Fixed rate deposits at local banks, on the other hand, shrank

3.8 trillion won from a month earlier in September, apparently as people sought other investment vehicles with higher yields. (Yonhap)