South Korea: More First-Time Home Buyers Eligible For Preferential Housing Loans

In South Korea, from July, more people applying for a mortgage to buy their first home will be able to get preferential benefits, including being able to borrow more money at a better rate of interest.

Previously, married couples had to have a combined income below 70, 000 U.S. dollars to qualify for the benefits, but this limit has been raised to about 79, 000 dollars.

One of the benefits is that the loan-to-value ratio is 10 to 20 percentage points higher, meaning that people can borrow a larger slice of their property’s value.

But housing loans are still limited to around 350, 000 dollars.

The government has also revised lending rules for under-34s and newly-weds who are borrowing money for “jeonse”, or paying a large deposit to lease a house.

The first 61, 000 of loans for “jeonse” used to have a maximum interest rate of roughly two percent, but now the first 88, 000 dollars will get this preferential rate.

Additionally, the government commission fee will shrink from zero-point-zero-five percent to zero-point-zero-two percent.

These changes are expected to help about five thousand more young people find a place to live.