Health Insurance Premium Deduction Benefits for Regional Subscribers Who Refinanced Their Judamdae Loans

Refinancing Loans Exceeding 3-Month Requirement Based on Housing Acquisition Date Also Recognized
Ministry of Health and Welfare's Active Administration Committee to Apply Retroactively from September Insurance Premiums

Archive photo / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Jo In-kyung] # Mr. A purchased a house worth 400 million KRW based on the publicly announced price in early 2020 and took out a mortgage loan of 300 million KRW. At that time, the mortgage interest rate was in the 3% range, and Mr. A had to pay about 750,000 KRW per month in loan interest. After fully repaying the existing loan, he refinanced with another loan at a 2% rate in early last year, reducing his loan interest by about 250,000 KRW. However, he was excluded from the health insurance premium deduction benefit for regional subscribers' housing finance debt, which applies from this month. This was due to the requirement that only loans incurred within three months before or after the housing acquisition date are eligible for the health insurance premium deduction.

For cases like Mr. A, where a loan was taken out to purchase a house but refinanced with another financial institution after three months, the door has now opened to receive the health insurance premium deduction benefit for housing finance debt.

The National Health Insurance Service (NHIS) announced on the 7th that, following the approval of the "Expansion Plan for Housing Finance Debt Deduction for Regional Subscribers" by the Ministry of Health and Welfare's Active Administration Committee on the 5th, the scope of housing finance debt deductions will be expanded.

Refinancing loans refer to cases where a previous loan meeting the housing finance debt deduction requirements existed in the past but was fully repaid at the time of application, and a new loan was taken out on the same day as the repayment.

From this month, under the amended National Health Insurance Act, regional subscribers who have taken out loans from financial institutions to purchase or rent a house worth 500 million KRW or less for actual residence purposes can apply for a regional subscriber insurance premium deduction with the NHIS. However, since July 1, when applications for housing finance debt deductions began to be accepted, many cases of refinancing loans have been excluded from the deduction due to the regulation that only loans within three months before or after the earlier of the acquisition date or move-in date are recognized.

The Ministry of Health and Welfare's Active Administration Committee judged that refinancing loans are not substantially different from loan extensions. They also comprehensively considered that the government actively encourages "Safe Conversion Loans" to reduce interest burdens and that applying deductions to refinancing loans is unlikely to conflict with higher-level laws.

Accordingly, regional subscribers who were previously excluded from the housing finance debt deduction due to refinancing loans can now receive the deduction.

To apply the deduction related to refinancing loans from the September insurance premium, applicants must visit the NHIS branch office by October 31. Applications submitted after October 31 will have the deduction applied from the insurance premium of the month following the application month, and previous premiums will be retroactively adjusted.

An NHIS official stated, "To improve cases where refinancing loans were excluded from the housing finance debt deduction, we plan to promote amendments to the relevant provisions of the Enforcement Decree of the National Health Insurance Act through consultations with the relevant ministries in the future."

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