South Korean housing loan regulation updates

Overview

South Korean authorities have implemented or restored specific mortgage and loan regulations to address housing finance concerns.

On August 31, a new calculation method for Loan-to-Value (LTV) ratios for relocation loans in redevelopment and reconstruction projects takes effect. The Financial Services Commission announced that LTV will be calculated using whichever is higher: the existing property valuation or the ‘member sale price’ of the new property. While this change aims to provide a more realistic collateral value to alleviate financial burdens, regulatory LTV ratios and maximum loan caps remain unchanged.

Concurrently, the Ministry of Land, Infrastructure and Transport has moved to restore original mortgage conditions for ‘New Home’ public housing pre-subscribers following public backlash. The restored terms include dedicated mortgages with a maximum maturity of 40 years and fixed interest rates between 1.9% and 3.0%, as well as optional Jeonse loans with fixed rates between 1.7% and 2.6%.

Entities

Kim Jae-seop · Lee Eok-won · Kim Yun-deok · Ministry of Land, Infrastructure and Transport · Financial Services Commission

Timeline

1 day ago

[BUSINESS] 3 sources
South Korea restores original mortgage terms for New Home subscribers
South Korea's Ministry of Land, Infrastructure and Transport will restore original 2022 mortgage terms for ‘New Home’ public housing subscribers, offering up to 40-year terms and fixed rates of 1.9–3.0%.
3 days ago

[BUSINESS] 2 sources
South Korea to update relocation loan LTV basis for redevelopment
South Korea will change how relocation loans for redevelopment projects are calculated starting the 31st, using the higher of the existing property value or the new member sale price as the LTV basis.

Sources

bjynews.com · housing-post.com · seoul.co.kr · tokenpost.kr