Shinhan Bank, Mortgage Loan Interest Deferral Program... Up to 2%P Deferral

For customers holding mortgage loans over 100 million KRW with an interest rate increase of 0.5%p or more compared to the end of last year
Up to 2.0%p interest deferral based on the difference between the base rate at the time of deferment application and the base rate at the end of last year

[Asia Economy Reporter Yu Je-hoon] Shinhan Bank announced on the 1st that it will implement a 'Mortgage Loan Interest Deferral Program' to alleviate the interest burden on customers holding mortgage loans during the recent period of rapid interest rate hikes. The target of this interest deferral program is customers holding principal repayment mortgage loans with a balance of 100 million KRW or more, whose loan reference interest rate has increased by 0.5 percentage points or more compared to the end of last year.

Applicants can defer loan interest for up to 12 months by the difference between the loan reference interest rate at the time of application and the rate at the end of last year, up to a maximum of 2.0 percentage points, and only need to pay the principal and interest excluding the deferred interest. In particular, after the 12-month deferral period ends, the deferred interest can be paid in installments over 36 months, and no additional interest will be charged on the deferred interest.

For example, assuming the total loan interest rate is 6.0% (KOPIS 3.98% + spread 2.02%) at the time of applying for interest deferral next month, and the KOPIS new rate at the end of last year was 1.55%, the reference interest rate difference is 2.43 percentage points. In this case, if the interest deferral is applied for, the interest deferral will be up to 2.0 percentage points from the 2.43 percentage points difference, and the total loan interest rate will be 4.0% for 12 months (the total loan interest rate may vary if the reference interest rate or transaction performance changes). The deferred interest (2.0 percentage points) can be paid in installments over 36 months after 12 months.

The interest deferral program can be applied for at Shinhan Bank branches nationwide, and non-face-to-face applications will be available next month. A Shinhan Bank official said, "In a situation where the interest payment burden on loan customers is gradually increasing due to rapid interest rate hikes, we prepared this interest deferral program to ease the burden on customers even a little and coexist together," adding, "From existing financial support for vulnerable groups to this interest deferral program, we will continue proactive measures to ensure customers' housing stability and alleviate financial burdens."

Meanwhile, at the end of May, Shinhan Bank began support to ease the principal and interest burden of mortgage loans by extending the loan period by 5 years at the existing interest rate, thereby lowering the monthly repayment amount. It continues to provide support to reduce the burden on vulnerable borrowers during the interest rate hike period, including ▲ lowering mortgage loan interest rates exceeding 5% ▲ waiving spread fees when contracting mortgage loans with interest rate caps ▲ allowing selection of a 2-year fixed interest rate for jeonse deposit loans.