South Korean Jeonse households face surging interest burdens

Monthly average interest expenses for Jeonse (lump-sum deposit) households in South Korea rose by 144.2% over the last seven years, according to data from the second quarter of this year. This increase significantly outpaces the 66.1% rise seen in homeowner households during the same period.

In the second quarter, Jeonse households paid an average of 211,965 KRW in monthly interest, compared to 86,793 KRW in the second quarter of 2019. These costs include housing loans, credit loans, and other debt servicing. The rise in interest expenses has far exceeded the growth in disposable income for these households, which increased by only 5.6% since 2019.

Analysts suggest the disparity is driven by Jeonse tenants taking on additional loans to cover living expenses. Furthermore, rising Jeonse prices in Seoul, which have increased by 8.55% this year, continue to add pressure on renters.