[Current Status of Yeongkkeuljok] Tightening Interest Rates... Yeongkkeuljok Struggling to Lower Rates

[Asia Economy Reporter Song Hwajeong] The upward trend in interest rates is expected to continue for the time being, making it unlikely that the pain of the Yeongkkeul group will be easily resolved. Given this situation, the Yeongkkeul group is doing their best to reduce their interest burden even slightly.

Kim Eunjeong (35), who took out a 500 million won loan last year to purchase an apartment near Seoul, recently rushed to the bank with supporting documents after her husband was promoted. This was to apply for the right to request a lower interest rate. Considering that her husband received a performance bonus at the end of last year and they gathered some spare funds to partially repay the loan, the interest rate was reduced by 0.2 percentage points. Kim said, "I was suffocating from the rising loan interest rates, so I’m really relieved to be able to cut even 0.2 percentage points."

Lee Jinyoung (31), who took out a mortgage and a credit loan last year to invest in real estate and stocks, recently sold all her stocks to repay the credit loan. Although the stock losses were significant, she had no choice but to do so because if she stayed longer, the stock losses would increase and the interest rates would continue to rise, increasing the interest burden.

Lee plans to apply for the Anshim Conversion Loan next month. Her husband took out a mortgage loan to purchase a house near Seoul, but since the price exceeded 500 million won, they had not been able to apply until now. The government will start accepting applications for the second phase of the Anshim Conversion Loan with relaxed criteria from the 7th of next month. The second phase expands the housing price requirement from the previous 400 million won to 600 million won or less, and the income requirement is relaxed from a combined couple’s income of 70 million won to 100 million won or less. The loan limit is also increased from a maximum of 2.5 trillion won to 3.6 trillion won. Lee said, "The housing price criterion for the Anshim Conversion Loan was 400 million won until the end of last month, so I couldn’t even consider applying, but since it’s raised to 600 million won from this month, I’m thinking of applying. I’m doing everything I can to reduce the interest burden even a little."

Kim Junho (37), who purchased an apartment in a new town near Seoul last year, is feeling drained day by day. The apartment he bought with a 500 million won loan recently dropped in price by more than 100 million won. With interest rates rising and housing prices falling, Kim decided to sell the house. He judged that if things continued as they were, his entire salary would go toward paying interest, so it would be better to sell the house and repay the loan. However, even after putting the house on the market for several days, there has been no contact from potential buyers. Kim sighed, "Housing prices are highest today and interest is lowest today, so I need to sell the house as soon as possible to escape the interest hell, but the future looks bleak."

Kang Jihoon (32), who got married this year, purchased a small apartment with his then-girlfriend and now wife before their wedding last year. At that time, Kang, who took out a fixed-rate loan, was nagged by his wife about why he chose a fixed rate. However, after hearing from people around them about the increasing interest burden from choosing a variable rate recently, his wife’s attitude changed. These days, she praises him for choosing a fixed rate.

On the 15th, when the preferential safe conversion loan that changes variable-rate mortgage loans to long-term, fixed rates starting at an annual 3.7% was launched, counselors at the Safe Conversion Loan Call Center in Mapo-gu, Seoul, were answering inquiry calls. Photo by Moon Honam munonam@