HF Lowers Mortgage Loan Interest Rates... Switch to 3% Range Preferential Safe Conversion Loan for the Best Deal!

Bogeumjari Loan Interest Rate Reduced by 0.35%p to 4.15%~4.55% Annually

‘Safe Conversion’ Interest Rate Applied at 3.7%~4.0%, Announced by Housing Finance Corporation and Six Major Banks

[Asia Economy Yeongnam Reporting Headquarters, Reporter Kim Yong-woo] Korea Housing Finance Corporation (HF) is implementing an interest rate cut to ease the repayment burden on vulnerable groups amid the rising interest rate environment. Starting from the 17th, the interest rate for the Bogeumjari Loan will be lowered by up to 0.35 percentage points, applying rates from 4.15% to 4.55% per annum.

The Housing Finance Corporation will also begin providing advance guidance on the Safe Conversion Loan through its own and six major banks’ websites in line with the interest rate changes, and will accept applications for the preferential Safe Conversion Loan worth 25 trillion KRW starting September 15.

The six banks are Kookmin, Industrial Bank of Korea, NongHyup, Shinhan, Woori, and Hana Bank. The Safe Conversion Loan is a refinancing loan that converts variable or mixed-rate mortgage loans into long-term, fixed-rate, installment repayment loans.

The Corporation will reduce the interest rate of the Bogeumjari Loan, a long-term, fixed-rate, installment mortgage loan, by 0.35 percentage points starting August 17.

The ‘u-Bogeumjari Loan’ applied through the HF Corporation’s website will have rates ranging from 4.25% per annum for 10 years to 4.55% per annum for 50 years. The ‘Akkim e-Bogeumjari Loan,’ which is applied for online including electronic contracts, will have rates 0.1 percentage points lower, ranging from 4.15% per annum for 10 years to 4.45% per annum for 50 years.

An HF Corporation official stated, “We decided to lower the interest rates to ease the repayment burden on vulnerable groups, reflecting the somewhat stabilized government bond yields.”

To alleviate the financial burden on vulnerable groups during the rising interest rate period, the Safe Conversion Loan interest rates will be 0.45 to 0.55 percentage points lower than the u-Bogeumjari Loan rates.

Accordingly, the Safe Conversion Loan interest rates will be 3.8% per annum for 10 years to 4.0% per annum for 30 years, and for low-income youth, 3.7% per annum for 10 years to 3.9% per annum for 30 years.

The Safe Conversion Loan is a product that refinances variable or mixed-rate mortgage loans obtained from first and second-tier financial institutions into HF Corporation’s long-term, fixed-rate loans, with 25 trillion KRW of preferential loans supplied this year.

However, those with mortgage loans from financial institutions with fixed interest rates until maturity or those using policy mortgages (Bogeumjari Loan, Qualified Loan, Didimdol Loan) are not eligible to apply.

Applicants must be one-home owners with a combined household income of 70 million KRW or less and a housing price of 400 million KRW or less. Loans can be granted up to a maximum of 250 million KRW within the balance of the existing loan.

Additionally, to allow existing mortgage loan users to easily switch to the Safe Conversion Loan without additional financial costs, early repayment fees on existing loans will be waived.

From the 17th, information on product details, eligibility based on housing price, application methods, and schedules will be provided through the Housing Finance Corporation and the six major banks’ websites.

Customers who have mortgage loans from the six major banks should check the respective bank’s website, while those with loans from other banks or second-tier financial institutions should check the HF Corporation’s website.

Borrowers with housing priced at 300 million KRW or less can apply from September 15 to 28, and those with housing priced at 400 million KRW or less can apply from October 6 to 13. Selection of applicants will not be on a first-come, first-served basis but will be determined in order of lower housing prices.

Mortgage borrowers from the six major banks can apply at the bank’s branch or online, while borrowers from other banks and second-tier financial institutions can apply through the HF Corporation’s website or the Smart Housing Finance App.

President Choi Jun-woo said, “The Safe Conversion Loan is a policy product launched through cooperation among the government, Housing Finance Corporation, and all financial institutions to support those struggling with increased repayment burdens due to rising interest rates,” adding, “With fixed interest rates in the 3% range until maturity and waived early repayment fees, switching to the Safe Conversion Loan is worth considering.”