"Yongin Suji 1 Billion Apartment, Loan Reduced by 100 Million"… 6·17 Policy Q&A

[Asia Economy Reporters Yoo In-ho and Moon Je-won] The June 17 real estate measures have significantly tightened regulations on mortgage loans and jeonse (key money deposit) loans. The intention is to no longer allow speculation in real estate using bank money as leverage.

According to the Ministry of Land, Infrastructure and Transport and the Financial Services Commission on the 18th, mortgage loans for houses priced over 1.5 billion KRW in 17 newly designated speculative overheating zones, including Suwon, Anyang, and Suji in Gyeonggi Province, will be completely banned starting from the 19th.

Loans for both home purchase purposes and returning rental deposits will be blocked. For purchases of apartments priced over 300 million KRW in speculative areas or speculative overheating zones, if the buyer continues to live in another home under a jeonse contract, regulations to block jeonse loans are expected to take effect as early as mid-next month.

This is because it will take at least about a month to revise the internal rules of guarantee institutions, update systems, and develop bank IT systems. The revised mortgage and jeonse loan regulations are summarized in a Q&A format by case.

- I am planning to buy a 1 billion KRW house in Suji, Yongin. How much will the mortgage loan amount decrease?

▲ Previously, Suji was a regulated area, but now that it has been designated as a speculative overheating zone, the Loan-to-Value ratio (LTV) will decrease by 100 million KRW. When it was a regulated area, the LTV was 50% for amounts up to 900 million KRW (450 million KRW) and 30% for amounts exceeding 900 million KRW (30 million KRW), totaling 480 million KRW. However, as a speculative overheating zone, the LTV is tightened to 40% for amounts up to 900 million KRW (360 million KRW) and 20% for amounts exceeding 900 million KRW (20 million KRW). Additionally, the Debt-to-Income ratio (DTI) is lowered by 10 percentage points from 50% in regulated areas to 40% in speculative overheating zones, which may further reduce the actual loan amount. Mortgage loans are completely prohibited for houses priced over 1.5 billion KRW in speculative overheating zones.

- I want to buy an apartment in Hanam City, but the tenant's jeonse contract has 9 months remaining. Can I get a mortgage loan?

▲ No. Previously, in Hanam City, a speculative overheating zone, mortgage loans required moving in within one year, but this period has been shortened to six months. If you fail to move in within the given period, the loan will be recalled and housing-related loans will be restricted for three years. If you own an existing home, it must also be disposed of within six months. Violating this rule will result in loan recall. However, if you signed the housing sales contract and paid the deposit before the strengthened loan regulations take effect on July 1, the previous one-year move-in obligation applies. Meanwhile, for installment payments on pre-sale apartments or reconstruction relocation loans, moving in within six months from the date of ownership transfer registration is required, as physical completion must be achieved for move-in.

- I have a jeonse loan but want to buy a 400 million KRW apartment in Cheongju City. Will the jeonse loan be recalled?

▲ No. Under the new measures, if a person with a jeonse loan buys an apartment over 300 million KRW in a speculative area or speculative overheating zone, the loan must be recalled immediately. However, Cheongju City is a regulated area, so this rule does not apply. Also, even in speculative areas or overheating zones, those who already have jeonse loans will not have their loans recalled immediately if they buy a house over 300 million KRW, but loan maturity extensions will be restricted. Those who own homes in the area cannot get new jeonse loans.

- The regulations for the Bogeumjari Loan are also changing.

▲ Currently, there is no move-in obligation for borrowers, but going forward, moving in within three months and living there for at least one year will be required. Violations will result in loan recall. This will apply to Bogeumjari Loan applicants from the 1st of next month.

- I am a real estate sales and rental business operator. Can I get mortgage loans for houses outside regulated or speculative overheating zones?

▲ No. Mortgage loans are prohibited for real estate sales and rental business operators, whether individuals or corporations, in all areas. This will be enforced from July 1. Taxes on corporate housing investments will also be strengthened. Currently, comprehensive real estate tax is imposed by summing the publicly announced prices of houses held by taxpayers regardless of individual or corporation status, but going forward, a single tax rate (3%, 4%)?the highest rate among individual rates?will be applied to houses held by corporations.

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