Jugumgong Lowers Bogumjari Loan Interest Rates by up to 0.35%p

[Asia Economy Reporter Eunju Lee] Korea Housing Finance Corporation announced on the 11th that from the 17th, it will lower the Bogeumjari Loan interest rates by up to 0.35 percentage points, applying rates from 4.15% to 4.55% per annum. The Bogeumjari Loan is a policy financial product of the Korea Housing Finance Corporation, which is a mortgage loan with fixed interest rates and principal repayment in installments until the agreed maturity.

Accordingly, the 'u-Bogeumjari Loan' applied for through the Korea Housing Finance Corporation website will have rates ranging from 4.25% (10 years) to 4.55% (50 years) per annum, and the 'Akkim e-Bogeumjari Loan' applied for online via electronic contracts will have rates 0.1 percentage points lower, ranging from 4.15% (10 years) to 4.45% (50 years) per annum.

A Korea Housing Finance Corporation official explained, "Reflecting the somewhat stable trend in government bond yields, we decided to lower the interest rates to ease the repayment burden on vulnerable groups."

With the decrease in Bogeumjari Loan interest rates, the interest rates for the Anshim Conversion Loan have also been lowered. The Korea Housing Finance Corporation stated that to alleviate the financial burden on vulnerable groups during periods of rising interest rates, the Anshim Conversion Loan interest rates will be 0.45 to 0.55 percentage points lower than the u-Bogeumjari Loan rates. Accordingly, the Anshim Conversion Loan interest rates will range from 3.8% (10 years) to 4.0% (30 years) per annum, and for low-income youth*, from 3.7% (10 years) to 3.9% (30 years) per annum.

The Anshim Conversion Loan is a product that refinances variable or mixed-rate mortgage loans obtained from primary and secondary financial institutions into long-term, fixed-rate loans from the Korea Housing Finance Corporation, with a preferential supply of 25 trillion KRW this year. Those using fixed-rate mortgage loans from financial institutions or policy mortgages (Bogeumjari Loan, Qualified Loan, Didimdol Loan) with fixed interest rates until maturity are not eligible to apply.

Applicants must be one-homeowners with a combined household income of 70 million KRW or less and a housing price of 400 million KRW or less. Loans up to 250 million KRW are available within the balance of existing loans. Additionally, to allow existing mortgage loan users to switch easily to the Anshim Conversion Loan without additional financial costs, early repayment fees on existing loans will be waived.

The Korea Housing Finance Corporation and six major banks will provide information on product details, eligibility based on housing prices, application methods, and schedules through their websites starting from the 17th. Customers who obtained mortgage loans from the six major banks can check on their respective bank websites, while those who obtained mortgage loans from other banks or secondary financial institutions can check on the Korea Housing Finance Corporation website.

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

Choi Jun-woo, President of the Korea Housing Finance Corporation, said, "The Anshim Conversion Loan is a policy product launched through cooperation among the government, Korea Housing Finance Corporation, and all financial institutions to support those struggling with increased repayment burdens due to rising interest rates. With fixed interest rates in the 3% range until maturity, free from interest rate rise risks, and waived early repayment fees, it is worth considering switching to the Anshim Conversion Loan."