Woori Bank Eases Jeonse Loan Limits and Terms... Introduces 0.2%P Special Preferential Interest Rate

[Asia Economy Reporter Song Seung-seop] Woori Bank will restore the limits and terms of Jeonse loans, which had been reduced to slow down the increase in household loans, to their previous levels and also lower mortgage loan interest rates.

According to the financial sector on the 18th, Woori Bank will change the Jeonse loan limit related to lease (Jeonse) contract renewals starting from the 21st. The limit, which was previously "within the amount of increase in the deposit (Jeonse price)," will be changed to "within 80% of the deposit stated in the renewal contract." Previously, borrowers could only borrow an amount equivalent to the increase in the Jeonse price, but from the 21st, they will be able to borrow up to 80% of the total deposit. However, if there is an outstanding loan borrowed to pay the deposit, the remaining amount that can be borrowed will be the difference after deducting the outstanding loan from the 80% limit.

In October last year, Woori Bank implemented a policy to lend only the amount corresponding to the increase in Jeonse prices in accordance with the financial authorities' order to manage the total volume of household loans.

The application period regulation for Jeonse loans will also be relaxed. Previously, loan applications were only possible before the balance payment date stated in the contract. From the 21st, Jeonse loan applications can be made within 3 months from the earlier of the balance payment date or the resident registration move-in date on the new Jeonse contract. This means it will be possible to pay the Jeonse deposit by borrowing money elsewhere, move in, and then receive the loan within 3 months. The clause that allowed loan applications only before the renewal contract start date will also be changed to allow applications within 3 months from the start date.

A new "special preferential interest rate for new loans" of 0.2 percentage points has also been introduced. The preferential interest rate applies to apartment loans and real estate loans secured by housing or residential officetels, as well as Woori Jeonse Loan and Woori WON Housing Loan. The period is from the 21st of this month to May 31. It applies only to new loans and does not apply to extensions, renewals, or changes in conditions.