LTV of 50% and 30% Applied to 900 Million KRW Standard in Adjustment Areas Including Suwon and Anyang

Archive photo / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Jo Gang-wook] From the 2nd of next month, the Loan-to-Value ratio (LTV) for mortgage loans in regulated areas such as Suwon and Anyang will change from 60% to 50% and 30%, based on a 900 million KRW threshold.

The Financial Services Commission and the Financial Supervisory Service announced on the 28th that the loan regulations included in the 2.20 housing market stabilization measures will be strengthened and implemented from the 2nd of next month.

According to these loan regulations, the previously uniform LTV regulation rate of 60% for regulated areas will be lowered to 50% for the portion of the property price up to 900 million KRW. For the portion exceeding 900 million KRW, a 30% LTV will be applied.

However, "low-income and genuine demand borrowers" who meet all the following conditions?household heads without home ownership, housing price below 500 million KRW, and combined annual income of the couple below 60 million KRW (70 million KRW for first-time buyers)?will continue to receive an additional 10 percentage points on the LTV as before.

The requirements for genuine demand will also be strengthened for business loans for home purchase purposes and mortgage loans for single-home households within regulated areas.

The current regulation that prohibits business operators engaged in industries other than housing rental and housing sales from obtaining mortgage loans for home purchases in speculative areas and speculative overheating districts will be expanded to include regulated areas. Borrowers who have signed a housing sales contract and can prove that the deposit has already been paid by the 1st of next month will be subject to the previous regulation (LTV 60%).

For group loans, projects that have announced recruitment of residents by the 1st of next month will be subject to the previous regulations. However, if pre-sale rights of projects already announced are resold after the enforcement date, the strengthened regulations will apply.

The ban on mortgage loans for home purchases on ultra-high-priced apartments exceeding 1.5 billion KRW will not be implemented in regulated areas. This measure applies only to speculative areas and speculative overheating districts such as Seoul.

Earlier, on the 20th, the government newly designated areas such as Suwon Gwonseon and Yeongtong, Anyang Manan, and Uiwang as regulated areas. Gwacheon, Seongnam, Hanam, Gwangmyeong, and Guri are existing regulated areas.

This content was produced with the assistance of AI translation services.