Bogeumjari Loan Interest Rate Rises by 0.1%P... Maximum 3.50% for 40-Year Term

Base interest rates by product and maturity for the Bogumjari Loan as of the 1st of next month. Photo by Korea Housing Finance Corporation

[Asia Economy Reporter Song Seung-seop] The interest rates for the Korea Housing Finance Corporation's long-term fixed-rate, installment-repayment mortgage loan product, ‘Bogeumjari Loan,’ will increase by 0.10 percentage points next month.

According to the Korea Housing Finance Corporation on the 21st, as of applications completed on February 1, the ‘u-Bogeumjari Loan’ and ‘t-Bogeumjari Loan’ will have rates ranging from 3.20% per annum (10 years) to 3.50% (40 years). The ‘Akkim e-Bogeumjari Loan’ will apply rates 0.1 percentage points lower, from 3.10% (10 years) to 3.40% (40 years) per annum.

The increase is largely attributed to the rise in government bond yields. However, if the Bogeumjari Loan application is completed within January, the pre-adjustment interest rates will apply.

Meanwhile, for Bogeumjari Loans with maturities of 10 to 30 years, there are no separate restrictions on eligibility. The ultra-long-term 40-year Bogeumjari Loan is only available to applicants who are 39 years old or younger, or newlywed households within 7 years of their marriage registration date (including those planning to marry within 3 months).

A Korea Housing Finance Corporation official explained, “While monthly repayment amounts generally decrease as the loan term lengthens, interest rates tend to increase with longer terms, resulting in a higher total interest burden over the entire repayment period. Therefore, it is necessary to carefully consider the use of the Bogeumjari Loan, loan amount, term, and repayment method based on the applicant’s economic activities and financial circumstances.”