Increase of Loan Limit to 50 Million Won for Non-Homeowners and Genuine Buyers to Purchase Their Own Home

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Starting next year, the limit for Didimdol loans will be increased by 50 million KRW to expand homeownership opportunities for non-homeowners and genuine buyers.

On the 27th, the Ministry of Land, Infrastructure and Transport announced the '2022 Major Work Plan,' which aims to consistently manage household debt while strengthening financial support for low-income and genuine buyers.

The Ministry set a goal to stabilize the household debt growth rate next year at 4-5%, the level before COVID-19. They will expand the application of borrower-level DSR (Debt Service Ratio) to ensure loans are only granted within the borrower's repayment capacity.

From January next year, borrowers with total household loans exceeding 200 million KRW will be subject to a DSR 40% regulation. This means loans with annual principal and interest repayments exceeding 40% of annual income will not be allowed. From July, borrowers with total loans exceeding 100 million KRW will also be subject to this regulation.

Incentives such as loan limits and interest rate benefits will be provided for installment repayments, along with reduced contribution fees to KSH (Korea Housing Finance Corporation) for installment jeonse loans and additional preferential treatment for financial institutions with excellent performance. Additionally, fixed-rate loans will be expanded by continuously supplying fixed-rate policy mortgages such as the Bogeumjari Loan.

The Didimdol loan support amount, which assists low-income genuine buyers in purchasing homes, will also be increased. Didimdol loans are financial products for low-income households that provide loans at an interest rate in the 2% range for purchasing homes priced up to 500 million KRW, provided certain conditions such as a combined annual income of 60 million KRW or less for couples are met.

From January next year, the loan support limit will increase by 50 million KRW: from 200 million KRW to 250 million KRW for general households, from 220 million KRW to 270 million KRW for newlyweds, and from 260 million KRW to 310 million KRW for multi-child families.

Additionally, there is consideration to raise the special guarantee limit for jeonse loans for vulnerable groups such as basic livelihood security recipients from the current 40 million KRW to 80 million KRW. The Ministry is also reviewing an extension of the Bogeumjari Loan preferential program for low-income earners, which operates until September next year. This program reduces monthly repayment burdens by offering a 0.1% point interest rate discount to low-income earners with a combined annual income of 45 million KRW or less and home prices of 300 million KRW (500 million KRW in the metropolitan area) or less.

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