seoul: South Korea's household credit surged by the largest margin in three years during the third quarter, fueled by a significant increase in home-backed loans despite tighter lending standards and elevated interest rates, according to central bank data released on Tuesday. According to Yonhap News Agency, the outstanding household credit stood at 1,913.8 trillion won (US$1.372 trillion) at the end of September, marking an 18 trillion won rise from the previous quarter. This growth represents the second consecutive quarterly increase, following a 13.4 trillion-won rise in the April-July period and marks the most significant uptick since the third quarter of 2021. Household credit encompasses credit purchases and loans provided to households by financial institutions. This increase in household loans occurred despite heightened borrowing costs, which resulted from the Bank of Korea's (BOK) successive interest rate hikes aimed at curbing inflation and stringent lending criteria. Within the total, househol d loans reached an unprecedented 1,795.8 trillion won by the end of September, increasing by 16 trillion won from the preceding quarter. This third-quarter rise also marks the largest in three years. Specifically, mortgage loans grew by 19.4 trillion won during this period, accelerating from the prior quarter's 16 trillion-won increase, while other forms of household loans saw a decline of 3.4 trillion won, compared to the previous quarter's 2.7 trillion-won drop. In response to moderating inflation and weakening domestic demand, the country's central bank reduced its key interest rate by a quarter percentage point to 3.25 percent last month. Prior to this adjustment, the BOK implemented seven consecutive rate hikes from April 2022 to January 2023.