"Let's Avoid the Downpour with a 3% Interest Rate"... Safe Conversion Loan Guide Begins

[Asia Economy Reporter Eunju Lee] Starting today (the 17th), six major commercial banks and the Korea Housing Finance Corporation have launched an information site related to the Anshim Conversion Loan. Amid the ongoing high-interest rate phenomenon, questions from borrowers trying not to miss the opportunity to switch to low-interest loans are being shared online. However, since the conversion condition is limited to ‘housing price market value of 400 million KRW or less,’ there does not seem to be a significant surge in applications.

According to the Korea Housing Finance Corporation on the 17th, from today, the corporation and six major banks have started a pre-guidance service for the Anshim Conversion Loan. The Anshim Conversion Loan is a product that converts variable or mixed-rate mortgage loans obtained from primary and secondary financial institutions into long-term, fixed-rate policy mortgages from the Korea Housing Finance Corporation to reduce the economic burden on mortgage borrowers during periods of rising interest rates.

On online platforms such as Naver Knowledge-iN, questions about the eligibility criteria for the conversion loan are continuously being asked. In particular, since the housing price criterion for applying for the Anshim Conversion Loan is limited to ‘market value of 400 million KRW or less,’ inquiries are mainly coming from borrowers who own homes with similar market values. They are asking whether the standard for the market value used for conversion eligibility is the ‘officially assessed land price (Gongsi Jiga)’ or the ‘KB market price,’ and whether they qualify for conversion. Borrowers who have taken out loans with variable interest rates lower than the Anshim Conversion Loan are also asking whether switching to a fixed interest rate would be beneficial in the long term.

On the Korea Housing Finance Corporation’s information page and the six major commercial banks’ sites, borrowers can check whether they meet the ‘eligibility criteria’ and confirm their application eligibility. The Korea Housing Finance Corporation’s information page has opened a ‘Check Application Eligibility’ section to help individuals perform a self-check. For example, by answering questions such as “Is the loan you want to repay from a corporation or a private lender?” and “Do you or your spouse own any other houses besides this one?” respondents can immediately see whether they are eligible to apply for the conversion loan (if they click ‘Yes’ to certain questions, a popup will immediately inform them that they are not eligible for the loan). Additionally, by entering the address of the house, the page calculates and provides the ‘KB Kookmin Bank market price’ along with the ‘estimated collateral evaluation amount.’

The major commercial banks also operate guidance pages that allow borrowers to self-check their eligibility for the Anshim Conversion Loan and confirm whether they can apply. KB Kookmin Bank’s guidance page is arranged so that users can immediately make a ‘branch visit reservation’ or ‘consultation request.’

Also, through a ‘loan calculator,’ borrowers can input loan amounts, interest rates, and repayment periods to check the principal and interest they will need to repay monthly in the future. In the case of Industrial Bank of Korea, to prepare for questions about the housing price criteria, they emphasize that “housing prices are reviewed in the order of KB Kookmin Bank market price → Korea Real Estate Board market price → officially assessed land price (Gongsi Jiga) adjusted by realization rate → appraisal value.”

However, in financial communities, there is a subdued atmosphere regarding active loan inquiries. Rather than inquiries about the loan details, many criticisms of the policy are being shared, such as “It makes no sense to apply a 400 million KRW limit when even the pre-sale prices exceed 500 million KRW” and “desk-bound administration.” This seems to be because the application criterion of 400 million KRW or less has become widely known. There are also frequent criticisms that the eligible annual income conditions are “unrealistic.”

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