[10·26 Debt Measures Q&A] ① Cases Excluded from Borrower-Unit DSR Application?

[Asia Economy Reporter Park Sun-mi] Although the implementation date for the second phase of the borrower-level Debt Service Ratio (DSR) was moved up to January 2022, if a housing unit was purchased based on the pre-sale announcement date before the implementation, the borrower-level DSR will not apply even if the total loan amount exceeds 200 million KRW at the time of the final payment loan. The timing of application and exceptions related to the early implementation of the second phase of borrower-level DSR are summarized in a Q&A format.

Q. What is the total loan amount criterion for determining whether borrower-level DSR applies, and when does it take effect?

A. From January 2022, the total loan amount used to determine whether borrower-level DSR applies includes the sum of all household loans from financial institutions (including applications). For revolving loans (e.g., overdraft accounts), the limit amount is considered rather than the actual used amount. If a new loan is intended to repay an existing loan, the amount scheduled for repayment is excluded from the total loan amount calculation. If the sum of the borrower's existing loans and new loan applications exceeds 200 million KRW (100 million KRW from July 2022), borrower-level DSR will be applied.

Q. If the borrower-level DSR target is expanded and the existing total loan amount already exceeds 200 million KRW, must the borrower repay the portion exceeding the DSR regulatory ratio?

A. The principle of non-retroactive application is maintained. In other words, the new regulation applies only to new loan applications, and there is no retroactive application to existing loans that would require repayment. Additionally, grace provisions will be granted for final payment loans to ensure that the expectations at the time of the original pre-sale are not undermined.

Q. If the total loan amount exceeds 200 million KRW, will borrower-level DSR apply when newly applying for 'jeonse loans or interim payment loans'?

A. Starting next year, in principle, if the total household loans held by the borrower exceed 200 million KRW, the borrower will be classified as subject to borrower-level DSR. For additional loan applications, ▲if the DSR already exceeds 40% or ▲if the additional loan causes the DSR to exceed 40%, the additional loan will not be approved. However, loans that are ▲recognized to be repaid from separate resources outside of income, ▲handled due to policy necessity, or ▲small loans with minimal practical impact may be approved regardless of the DSR level.

Q. For those who purchased before the implementation of borrower-level DSR phase 2, if the total loan amount exceeds 200 million KRW at the time of final payment loan handling, will borrower-level DSR apply?

A. Loans newly handled after the borrower-level DSR phase 2 implementation date (January 2022) are, in principle, subject to borrower-level DSR if the total loan amount exceeds 200 million KRW. However, borrowers who purchased based on the pre-sale announcement date before the phase 2 implementation are exempt from borrower-level DSR even if the total loan amount exceeds 200 million KRW at the time of final payment loan handling.

Q. If a borrower who held a credit loan exceeding 200 million KRW before the system implementation extends the maturity of that credit loan after the implementation date, will borrower-level DSR apply?

A. When extending the maturity of an existing loan after the system implementation, borrower-level DSR will not apply even if the total amount exceeds 200 million KRW. If the borrower was subject to borrower-level DSR but repays part of the loan so that the amount falls below the threshold, they will also be exempt from borrower-level DSR.