[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] Advance guidance on the ‘Safe Conversion Loan,’ which caps mortgage loan interest rates for houses priced under 400 million KRW at the 3% level, will begin on the 17th.
Korea Housing Finance Corporation (HF) plans to provide information on eligibility and application methods for the Safe Conversion Loan on its own and six major banks’ advance guidance websites. The six banks are Kookmin, IBK, Nonghyup, Shinhan, Woori, and Hana Bank.
The Safe Conversion Loan is a product that converts variable or mixed-rate mortgage loans obtained from first- and second-tier financial institutions into HF Corporation’s long-term fixed-rate policy mortgage to reduce the economic burden on mortgage borrowers during periods of rising interest rates. It offers an opportunity to refinance for those using mortgage loans that apply fixed rates for a certain period before switching to variable rates.
Applications and submissions will start on September 15.
The loan interest rates range from 3.8% per annum (10 years) to 4.0% (30 years), and for low-income youth (under 39 years old, income under 60 million KRW), rates of 3.7% (10 years) to 3.9% (30 years) per annum will apply.
If the current mortgage loan was obtained from one of the six major banks, applicants can check the advance guidance site of the respective bank. For loans from other banks or second-tier financial institutions (such as savings banks or insurance companies), eligibility, application methods, schedules, and required documents can be checked on the HF Corporation’s website.
Applicants can immediately verify their eligibility through a checklist including house price, income, and number of houses owned. In particular, it is possible to check the market price and official assessed price of the applicant’s house (considering the realization rate), allowing confirmation of whether the house price meets the under 400 million KRW requirement.
Applications and submissions for the Safe Conversion Loan begin on September 15. If the existing mortgage loan institution is one of the six major banks, applications can be made through the bank’s branch or online. For other banks and second-tier financial institutions, applications can be submitted via the Housing Finance Corporation website or the Smart Housing Finance App.
Selection of recipients will be determined in order of lowest house price. First, applications for houses priced under 300 million KRW will be accepted from September 15 to 28. If the total amount does not reach 25 trillion KRW, a second round for houses priced under 400 million KRW will be held from October 6 to 13, proceeding sequentially.
Additionally, to prevent applicants from crowding on a specific day, application days are assigned based on the last digit of the applicant’s birth year in their resident registration. For example, those whose birth year ends in 4 or 9 apply on Thursday, and those ending in 5 or 0 apply on Friday.
Customers can check the types of documents required for screening, such as resident registration certificates, family relation certificates, and health insurance payment confirmation.
Since the loan screening conducted by the corporation receives related information directly via computer from relevant agencies such as the National Tax Service, the burden of document submission on customers is expected to decrease.
President Choi Jun-woo said, “The preferential Safe Conversion Loan introduced this time is designed to minimize customer inconvenience caused by delays in application and screening by sharing the screening process between the corporation and the six major banks,” and added, “We recommend switching to the Safe Conversion Loan with a fixed interest rate as low as 3.7% per annum until maturity.”
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