Loans extended to households by local lenders and other financial institutions rose at a faster rate in October than a month earlier amid a continued rise in demand for mortgages, central bank data showed Tuesday.
  

Outstanding household loans by commercial banks and savings banks came to 792.4 trillion won ($674.9 billion) as of end-October, up 11.8 trillion won from the previous month, according to the preliminary data from the Bank of Korea.
  

The October tally marks an 8.5 percent increase from the same month last year, compared with an 8 percent on-year gain in September.
  

The increase was largely attributed to a rise in home-backed loans amid growing demand for homes, partly propelled by record low borrowing rates.
  

In an apparent attempt to bolster growth in Asia's fourth-largest economy, the central bank slashed its key rate to a record low of 1.5 percent through four rounds of rate cuts in less than a year since August 2014.
  

In the first 10 months of the year, the number of home transactions here spiked 22.5 percent on-year to over 1 million, already surpassing the annual total of 2014, the land and transportation ministry said earlier.
  

In October, home-backed loans extended by local lenders gained 7.5 trillion won from a month earlier to 487.5 trillion won, according to the BOK.
  

From a year earlier, home-backed loans also expanded 8.2 percent.
  

Household loans extended by large commercial banks increased 8.6 trillion won from the previous month to 550.2 trillion won as of end-October, while those extended by mutual savings and finance banks reached 242.2 trillion won, gaining 3.2 trillion won over the cited period.
  

Growing household debts have often been cited as a potential risk, especially ahead of what BOK Gov. Lee Ju-yeol has called an imminent U.S. rate hike in the very near future, which could prompt a mass outflow of foreign capital and thus push up interest rates here.
  

Many economists, however, believe the South Korean central bank will likely maintain its wait-and-see mode at least for some time as it continues to gauge the impact of its rate cuts on the local economy.
  

In a recent poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency, all 14 economists surveyed forecast the BOK's monetary policy board to keep its key rate frozen for December. The policy rate has been fixed at the record low level since June. (Yonhap)