The Bogeumjari Loan Interest Rate, Which Rose for Three Consecutive Months, Is 'Frozen' in December

[Asia Economy Reporter Song Seung-seop] The interest rate for the Bogumjari Loan, which had risen for three consecutive months, will be frozen in December.

The Korea Housing Finance Corporation announced on the 26th that it will freeze the December interest rate for the Bogumjari Loan, a long-term fixed-rate, installment-repayment mortgage loan. The Bogumjari Loan interest rate had increased by 0.10 to 0.20 percentage points since September.

Accordingly, by loan maturity, the ‘u-Bogumjari Loan’ and ‘t-Bogumjari Loan’ will have a fixed interest rate of 3.10% per annum (10 years) to 3.40% (40 years), and the ‘Akkim e-Bogumjari Loan’ will have a base rate 0.1 percentage points lower, fixed at 3.00% per annum (10 years) to 3.30% (40 years) until maturity.

There is no separate restriction on the loan maturity period for the Bogumjari Loan from 10 to 30 years. However, for the ultra-long 40-year maturity Bogumjari Loan, only newlywed households where the applicant is 39 years old or younger or within 7 years of the marriage registration date (including those planning to marry within 3 months) are eligible.

A Housing Finance Corporation official explained, “Although monthly repayment amounts generally decrease as the loan maturity lengthens, the interest rate increases with longer maturities, so the total interest paid over the entire repayment period increases.” He added, “It is necessary to carefully decide on the use of the Bogumjari Loan, loan amount, maturity, and repayment method, considering the applicant’s economic activity and financial situation.”