KakaoBank Mortgage Loan Balance Surpasses 1 Trillion Won in 10 Months Since Launch

Effectiveness of Low Interest Rates and No Prepayment Penalty Fees

[Asia Economy Reporter Minwoo Lee] KakaoBank's outstanding balance of mortgage loans has exceeded 1 trillion won just 10 months after its launch.

KakaoBank announced on the 7th that the outstanding balance of its mortgage loan product, launched last February, has surpassed 1 trillion won, with a cumulative number of inquiries reaching 620,000. Factors such as low interest rates, expansion of eligible regions for mortgage loans, and no prepayment penalties appear to have been effective.

Previously, since August, KakaoBank expanded the eligible regions for its mortgage loan products from the metropolitan area and five major metropolitan cities to nationwide. For mixed and variable interest rate products, the maximum loan term was extended to 45 years to ease the monthly principal and interest repayment burden. The interest rates themselves are also low. According to KakaoBank, "According to the Bank Federation's disclosure, the average interest rate for KakaoBank's installment repayment mortgage loans handled in October was 4.19%, the lowest among 16 banks offering mortgage loans."

The fact that there are no prepayment penalties was also cited as a popular factor. KakaoBank stated that the prepayment fees saved by mortgage loan customers amounted to 1.4 billion won as of November. In a survey of KakaoBank mortgage loan users, 68% of respondents cited "exemption from prepayment penalties" as a reason for their satisfaction with KakaoBank's mortgage loans. KakaoBank plans to extend the prepayment penalty exemption policy until June next year.

They also claimed that simplifying various procedures is an advantage. The average time it takes to check the loan limit and interest rate at KakaoBank is 3 minutes and 29 seconds.

Meanwhile, among customers applying for home purchase funds last month, about 46%, nearly half, were first-time homebuyers. The proportion of customers aged 40 and above exceeded 53%.

A KakaoBank official said, "In the future, we will expand the range of eligible housing types to include various types such as villas, and strive to provide more customers with convenient and beneficial financial services."