Kim Hyun-mi "4.0% Jeonse-to-Jeonwol Conversion Rate Too High... Revision Policy"

Minister of Land, Infrastructure and Transport Kim Hyun-mi / Photo by Yonhap News

[Asia Economy Reporter Lim Juhyung] Kim Hyunmi, Minister of Land, Infrastructure and Transport, announced plans to lower the jeonwolse conversion rate, which is currently set at 4.0%.

On the 4th, Minister Kim appeared on JTBC's 'Newsroom' and said, "Considering the current base interest rate level, I think the (jeonwolse conversion rate) is excessive, so I plan to lower it."

Previously, in 2016, the government changed the existing jeonwolse conversion rate calculation method, which was applied as 'four times the base interest rate,' to a method that adds 3.5% to the base interest rate.

Since the current base interest rate is 0.5%, adding 3.5% results in a jeonwolse conversion rate of 4.0%.

Minister Kim explained, "At the time the 3.5% calculation method was established, the base interest rate was 2.5 to 3.0%. Now it is 0.5%."

She added, "I think 3.5% is excessive compared to the current base interest rate level."

When asked about the timing of revising the new calculation method, she replied, "We plan to work on revising the Enforcement Decree of the Housing Lease Protection Act."