HF to Increase Monthly Payments for New Housing Pension Applicants Starting February

Average Increase of 0.7%, Housing Price Cap Set at 1.2 Billion KRW

[Asia Economy Yeongnam Reporting Headquarters Reporter Lee Seryeong] Korea Housing Finance Corporation (HF) will slightly increase the monthly payments for new applicants of the Housing Pension starting February 1.

The Housing Pension is a financial product guaranteed by the government that allows seniors aged 55 and older to provide their home as collateral and receive lifelong monthly payments like a pension through loans from financial institutions to cover living expenses in old age.

The corporation annually recalculates key variables according to Article 9 of the Korea Housing Finance Corporation Act to ensure the stable operation of the Housing Pension system and that subscribers receive stable pensions throughout their lifetime.

It reassesses long-term key variables affecting the housing collateral value, total loan amount, and pension receipt period, such as housing price growth rate, interest rate trends, and changes in subscriber mortality rates, then calculates the monthly payment after approval by the Housing Finance Operation Committee.

Example of Monthly Payment for Housing Pension.

With this recalculation, the monthly Housing Pension payment for new applicants from February 1 will increase by an average of 0.7%.

Although the expected housing price growth rate rose compared to the previous year, the increase in interest rates and longer life expectancy partially offset this.

The threshold for high-priced homes under the Income Tax Act was revised from a market price of 900 million KRW to 1.2 billion KRW, changing the recognized housing price cap for calculating monthly Housing Pension payments to 1.2 billion KRW. Some homeowners with homes exceeding 900 million KRW may receive slightly higher monthly payments.

Existing Housing Pension subscribers will continue to receive the same pension amount as before, and the eligibility for Housing Pension subscription remains unchanged, limited to homes with a publicly announced price of 900 million KRW or less.

The corporation expects the total number of Housing Pension subscribers to have exceeded 92,000 households by the end of last year and anticipates surpassing 100,000 households this year through expanded eligibility, diversified pension receipt methods, and strengthened pension rights.

President Choi Jun-woo stated, “We plan to actively promote the activation of the Housing Pension by expanding the support scope and benefits of the preferential Housing Pension to increase income for elderly homeowners of low-priced homes.”

A corporation official said, “Since monthly payment adjustments vary depending on the subscriber’s age and housing price, it is advisable to decide the timing of the Housing Pension application through consultation. Also, because subscriber costs and spouse pension succession methods differ depending on the collateral provision method, we recommend inquiring in advance to subscribe to the Housing Pension that best suits the individual.”

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