KB Kookmin Extends Mortgage and Jeonse Loan Rate Cuts... 1%p Reduction in Loan Rates for Low-Income Borrowers

[Asia Economy Reporter Bu Aeri] KB Kookmin Bank announced on the 11th that it will implement a 'Financial Consumer Support Enhancement Program,' including interest rate reductions on housing-related loans. Starting this month, support for socially vulnerable groups will be prioritized, and other support measures will be implemented sequentially.

Kookmin Bank will extend the temporary interest rate reduction on mortgage loans and jeonse deposit loans (up to 0.45 percentage points for mortgage loans, up to 0.55 percentage points for jeonse deposit loans), which was implemented in April, until further notice. A preferential interest rate of 0.2 percentage points per annum will be uniformly applied to new customers with mixed-rate mortgage loans. Accordingly, new mixed-rate mortgage loan customers can enjoy an additional 0.65 percentage points interest rate benefit compared to the end of the first quarter.

The operation period of the capped interest rate mortgage loan special contract, implemented in July last year, has also been extended until July next year. The bank stated that the product competitiveness was enhanced by lowering the annual interest rate cap from 0.75 percentage points to 0.5 percentage points.

Additionally, Kookmin Bank will support guarantee fees for jeonse deposit return guarantees until the end of this year to reduce housing costs for low-income youth and newlyweds. Eligible customers are those who subscribe to the jeonse deposit return guarantee when applying for a new jeonse deposit loan at Kookmin Bank, and the target properties are houses with rental deposits up to 300 million KRW in Seoul and the metropolitan area, and up to 200 million KRW in other regions. The guarantee fee support is provided for up to two years within the initial contract period.

The new interest rates for loans supporting financially marginalized groups such as low-income workers and small business owners will be reduced by 1 percentage point annually. The target products include four types: 'KB Saehope Hope Loan II,' 'KB Saetdol Mid-Interest Loan,' 'KB Happiness Dream Loan II,' and 'KB Stepping Stone Loan.'

Financial support for socially vulnerable groups will also be provided. The preferential interest rate, previously applied only to disabled customers when applying for housing-related loans (jeonse deposit loans and mortgage loans), will be expanded to socially vulnerable groups, and the preferential rate margin will be increased from 0.1 percentage points to 0.3 percentage points. With this preferential interest rate support, the maximum preferential rates will be raised to 1.4 percentage points for jeonse deposit loans and 1.7 percentage points for mortgage loans.

Kookmin Bank has been operating a 'Long-term Installment Conversion Program' since May to prepare for the end of the financial sector's maturity extension and repayment deferral measures for COVID-19-affected companies expiring at the end of September. This program allows affected companies to repay loans in long-term installments (up to 10 years) if they face difficulties in repayment.

Furthermore, SOHO customers using high-interest loans will be offered a preferential interest rate of up to 2 percentage points annually when extending loan terms (including refinancing and re-loans). The support targets borrowers with loan interest rates exceeding 7% annually.

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