Loan Interest Rate at 7% Era... Complexes Offering Interest-Free Interim Payments Draw Attention

Interest Burden Reduction of Tens of Millions KRW per Household
‘Hillstate Dongtan Station Centric’ Applies 50%

The ongoing construction of the straightening and undergrounding of the Gyeongbu Expressway near the site where the Hillstate Dongtan Station Centric complex will be built.

[Asia Economy Reporter Cha Wanyong] As interest rates rise sharply, complexes offering interest-free interim payments are gaining attention.

According to the industry on the 12th, due to the impact of the base interest rate hike and the rise in market interest rates, a 7% loan interest rate era has opened for the first time in about 13 years, increasing concerns about interest burdens for new apartment or officetel contract holders.

Accordingly, complexes offering interest-free interim payment benefits are emerging one after another as a way to reduce consumers' financial burden while increasing contract rates. Developers selling residential officetels, which are relatively free from regulations, are moving quickly first.

Hyundai Construction's residential officetel "Hillstate Dongtan Station Centric," built in the Dongtan 2 New Town Metropolitan Business Complex, applies interest-free benefits on 50% of the interim payment. By paying a 10% down payment, there is no financial burden until move-in.

GS Construction's "Eunpyeong Xi The Star," currently being sold within walking distance of Subway Line 6 Eungam Station and Saejeol Station, also applies interest-free interim payments along with a fixed first installment contract payment of 10 million KRW. KCC Construction has offered a 50% interest-free interim payment benefit for "Misa Anello Switzen," supplied in the Mangwol-dong area of Hanam City, Gyeonggi Province.

With the base interest rate hike, the COFIX (Cost of Funds Index), which serves as the benchmark for variable-rate mortgage loans, has also risen significantly, making the effect of interest-free interim payments more substantial from the consumer's perspective.

The COFIX rate has risen by 2 percentage points over the past year, currently reaching 2.96%. There are forecasts that the COFIX rate will rise to the 4% range by the end of the year. With the interim loan spread also jumping, mortgage loan interest rates are expected to reach at least the 7% range.

Since interim loan interest is applied based on the number of days per installment, applying interest-free benefits results in savings of tens of millions of KRW.

A sales representative for Hillstate Dongtan Station Centric said, "With interest rates rising steeply, the interim loan interest per household is expected to be 50 to 60 million KRW," adding, "From the consumer's perspective, this means a significant reduction in cost burden."

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