Relaxation of Actual Buyer House Price and Income Requirements... LTV 10%P Additional Preferential Measures Likely

Housing Price Requirement Expected to Expand from '600 Million KRW to 900 Million KRW or Less'
Combined Annual Income for Couples Discussed to Change from '80 Million KRW to 100 Million KRW or Less'

[Asia Economy Reporter Kwangho Lee] Financial authorities will announce measures to ease regulations on loan-to-value ratio (LTV) and debt-to-income ratio (DTI) within this month. Plans to increase LTV and DTI by an additional 10 percentage points and lower income and housing price requirements are being discussed.

A financial authority official said on the 2nd, "To broadly support low-income and genuine buyers in acquiring their own homes, there is a strong possibility of easing housing price and income requirements and providing an additional 10 percentage point preferential treatment on LTV."

A member of the National Assembly's Political Affairs Committee also stated, "The LTV regulation easing plan for genuine buyers has been almost finalized," adding, "However, there are some opposing views that it could undermine the stability of the real estate market, so adjustments are underway."

Currently, non-homeowners who meet certain conditions receive a 10 percentage point relaxation on LTV and DTI when obtaining a mortgage loan to purchase a home.

In speculative areas and speculative overheating districts, the housing price must be 600 million KRW or less (500 million KRW or less in regulated areas), and the combined annual income of the couple must be 80 million KRW or less (90 million KRW or less for first-time buyers).

If both conditions are met, in speculative areas and speculative overheating districts, LTV and DTI can be up to 50% each (60% in regulated areas) for loans.

The financial authorities are pushing to add an additional 10 percentage points on top of this. Also, since there are many criticisms that the preferential system is losing effectiveness, they are considering expanding the scope of eligible applicants.

The plan to expand the scope of eligibility is expected to involve raising the housing price requirement from "600 million KRW or less" to "900 million KRW or less," reflecting the fact that the average apartment sale price in Seoul has long exceeded 900 million KRW. However, whether the "900 million KRW or less" target area will be limited to speculative areas and speculative overheating districts or extended to all regulated areas (speculative areas, speculative overheating districts, and regulated areas) requires further discussion.

The combined annual income requirement for couples is likely to be raised from "80 million KRW or less" to "100 million KRW or less."

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