[Hanae Big Step] Ruling Party Requests Government to Expand Refinancing Loan Scale for Homes Under 400 Million Won

"Big Step Increases Interest Burden on Ordinary People... Variable Rates Account for 77% of Household Debt"
Need to Expand 40 Trillion Won Fixed-Rate Safe Conversion Loans in the 4% Range

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Hyun-ji] The ruling party, the People Power Party, urged the government on the 14th to expand the scope and budget of the Safe Conversion Loan, which allows existing mortgage loans to be converted to fixed interest rates in the 4% range.

Seong Il-jong, chairman of the People Power Party's Policy Committee, said at the Supreme Council meeting held at the National Assembly on the same day, "As already requested to the government, we ask once again to significantly expand the scope of Safe Conversion Loans for houses priced under 400 million won, allowing variable interest rates of 7-8% to be converted to fixed interest rates in the 4% range," adding, "The scale should be increased beyond 20 trillion won this year and 20 trillion won next year."

He said, "The Bank of Korea's decision to raise the base interest rate was an unavoidable choice to somewhat curb the soaring inflation, but it is also true that this increases the interest burden on ordinary citizens," adding, "Household debt in the first quarter already stands at 1,859.4 trillion won, with variable interest rates accounting for 77% of household debt."

The People Power Party's request aims to reduce the interest burden on ordinary citizens who took out mortgage loans with high variable interest rates by allowing them to switch to low-interest loans. The Financial Services Commission has limited the Safe Conversion Loan to owners of a single house priced under 400 million won.

Chairman Seong mentioned, "We have already secured and are implementing budgets for various financial support projects for ordinary citizens through the supplementary budget in May," referring to the Safe Conversion Loan, Korea Asset Management Corporation (KAMCO) debtor adjustment support measures, special guarantee projects for low-credit borrowers, the Sunshine Loan Youth program for low-income young people, refinancing loans for small business owners, and customized new funding support. He added, "We have promised to improve the disclosure system for the interest rate spread between deposits and loans, and the People Power Party will promptly complete the establishment of the refinancing loan platform."

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