Crowds Flock to 'Jeokgyeok Daechul'... Sold Out Immediately After Release

NongHyup, Woori Bank Sold Out Immediately After Opening
Hana Bank Sales Start Today

[Image source=Yonhap News]

[Asia Economy Reporter Kiho Sung] Qualified loans with set limits are closing one after another as soon as sales begin this year as well. This is interpreted as a result of the fixed and low interest rates of qualified loans gaining popularity during the interest rate hike period, while supply has decreased due to total household loan volume regulations.

According to the financial sector on the 5th, Hana Bank will start selling qualified loans on this day. Hana Bank expects the limit to be exhausted soon as qualified loans are highly popular.

In fact, NH Nonghyup Bank reportedly exhausted its first-quarter quota of qualified loans within two business days after starting operations this year. Prior to this, Woori Bank filled its January quota on the first day of sales. Accordingly, Nonghyup Bank is expected to resume sales in April, and Woori Bank in February.

Qualified loans are low-interest policy financial products sold through private financial companies by the Korea Housing Finance Corporation (KHFC). Since there is no income limit, demand is high among dual-income couples and high-income earners without assets. Additionally, the house price criterion is set at 900 million KRW or less, which is higher compared to other policy products. Regardless of maturity, loans can be used at a fixed interest rate of 3.4% per annum as of January at most banks for periods between 10 and 40 years.

Qualified loans are receiving more attention amid the interest rate hike period. As of December last year, the variable interest rates on mortgage loans at commercial banks have already exceeded 5%. This shows a significant difference compared to the 3.4% rate of qualified loans.

The total limit for qualified loans has been shrinking every year. The sales performance of qualified loans was ▲12.6 trillion KRW in 2017 ▲6.9 trillion KRW in 2018 ▲8.5 trillion KRW in 2019 ▲4.3 trillion KRW in 2020. This year, the maximum supply target for qualified loans was set at about 7 trillion KRW, which is 1 trillion KRW less than before.

KHFC sets the total annual limit for qualified loans and allocates it to selling financial companies. Depending on the situation, the companies further divide the limits monthly or quarterly for sales. Currently, a total of 11 financial institutions handle qualified loans. In the banking sector, Nonghyup, SC First Bank, Hana, Woori, Kyongnam, Busan, Jeju, and Suhyup Banks sell this product. Among insurance companies, Samsung, Heungkuk, and Kyobo Life Insurance offer it.

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