KakaoBank Saves 25.2 Billion KRW in Interest for Mortgage Customers

63 Billion Benefit from Early Repayment Penalty Waiver
"Will Continue to Practice Win-Win Finance"

KakaoBank announced on the 3rd that as a result of introducing ‘interest rate discount’ benefits for mortgage loans, customers saved approximately 25.2 billion KRW in interest over four months.

KakaoBank has been offering some of the lowest interest rates in the industry, including introducing interest rate discount benefits for mortgage loans last February. In April, it also held a special promotion to celebrate the expansion of mortgage loans for row houses and multi-family houses. According to the Bankers Association disclosure, the average interest rate for amortized mortgage loans handled by KakaoBank in May was 3.88% per annum, the only bank among 16 banks to offer rates in the 3% range.

The number of refinancing customers also increased. The proportion of refinancing customers among all new mortgage loan customers rose from 28% in Q4 last year to about 54% in Q2 this year, nearly doubling. According to a survey conducted by KakaoBank targeting about 600 refinancing customers (multiple answers allowed), approximately 90% of respondents cited ‘affordable interest rates’ as the reason for choosing KakaoBank. Customers who switched to KakaoBank mortgage loans saved an average of about 3.21 million KRW annually in interest. The average loan execution interest rate was 3.8% per annum, which is 1.3 percentage points lower than the average interest rate of existing loans (5.1% per annum).

The exemption from prepayment penalties also drove the increase in refinancing customers. About 77% of survey respondents cited ‘no prepayment penalty’ as the reason for choosing KakaoBank refinancing. If the existing loan period is less than one year, a prepayment penalty must be paid, but KakaoBank relieved this burden. KakaoBank stated that the savings from the prepayment penalty exemption amounted to 6.3 billion KRW. The exemption from prepayment penalties will also be extended until the end of the year.

A KakaoBank official said, "We have realized win-win finance by providing financial cost reduction benefits to customers who chose our mortgage loans," and added, "We will prepare products so that customers can feel tangible benefits in upcoming products such as the Bogeumjari Loan and pre-sale balance loans."

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