[Household Debt Measures] '40-Year Ultra-Long-Term Mortgage' to Launch in Second Half of Year

For Those Under 39 Years Old and Newlyweds

[Asia Economy Reporter Oh Hyung-gil] A 40-year maturity policy mortgage product is expected to be launched as early as July this year. It targets young people under the age of 39 and newlyweds within 7 years of marriage.

The Financial Services Commission announced on the 29th a household debt management plan containing these details. Currently, policy mortgages are only offered up to a 30-year maturity, but a 40-year maturity loan will be introduced for policy mortgages (Bogeumjari Loan and Qualified Loan) targeting young people and newlyweds.

The Bogeumjari Loan allows borrowing up to 300 million KRW if conditions such as an annual income of 70 million KRW or less (only the individual if unmarried, combined for couples if married) and a housing price of 600 million KRW or less are met.

The Qualified Loan has no income requirements and allows borrowing up to 500 million KRW if conditions such as a housing price of 900 million KRW or less are met.

A Financial Services Commission official said, "While policy products such as the Buteummok Loan are based on the age of 34, considering that more time is needed to accumulate capital for home purchase decisions, support will be extended up to age 39."

With a longer maturity, the monthly principal and interest repayment burden decreases. For a 300 million KRW loan with a 40-year maturity, the monthly repayment amount is 1.04 million KRW (interest rate 2.75% per annum), which is 180,000 KRW (15.1%) less than the 1.22 million KRW for a 30-year maturity.

To enable young people to purchase homes without an initial large sum burden, a 'housing supply - ultra-long-term mortgage' linkage plan will also be promoted. The financial authorities plan to prepare and announce detailed measures after consultations with related ministries such as the Ministry of Land, Infrastructure and Transport.