NongHyup Bank Suspends MCI·MCG Loans... Also Reduces Preferential Interest Rates

[Asia Economy Reporter Kiho Sung] NH Nonghyup Bank is temporarily suspending mortgage credit insurance (MCI) and mortgage credit guarantee (MCG) loans. Along with this, preferential interest rate adjustments have also been made.

According to the banking sector on the 14th, Nonghyup Bank will temporarily suspend MCI and MCG loans starting the next day. The resumption date has not been determined.

MCI and MCG are insurance policies subscribed simultaneously with mortgage loans. Borrowers who subscribe to this insurance can receive loans up to the loan-to-value ratio (LTV), but without the insurance, they can only borrow the amount excluding the small lease deposit. This effectively means a reduction in the mortgage loan limit.

Additionally, from the 16th, preferential interest rates for jeonse loans, credit loans, and real estate collateral loans other than housing will be reduced. In the case of jeonse loans, the preferential interest rates for Seoul Guarantee Insurance, Korea Housing Finance Corporation, and Housing and Urban Guarantee Corporation (HUG) guaranteed jeonse loans will each decrease by 0.2 percentage points. From the customer's perspective, this means the final interest rate increases by that amount.

Credit loans targeted at high-quality customers such as employees of public enterprises and large corporations, namely the ‘Exciting Employee Loan’ and ‘Strong Employee Loan,’ will see their preferential interest rates reduced from 1.2 percentage points to 1.0 percentage points, a decrease of 0.2 percentage points.

Furthermore, the preferential limit for loans secured by real estate other than housing, such as land and factories, will decrease from 1.0 percentage point to 0.9 percentage points.

Nonghyup Bank stated, “Household loans, centered on mortgage loans, are rapidly increasing,” and added, “This measure was taken as part of loan volume management to focus on supporting funds for real demand, such as financial support for low-income households and small business owners.”