Special BoGeumjari Loan Interest Rate Reduced by 0.5%P... General Type 4.25~4.55%

Jugeumgong to Start Applications and Registrations from the 30th

[Asia Economy Reporter Yu Je-hoon] The government has decided to lower the interest rate of the Special BoGeumJaRi Loan, scheduled for release on the 30th, by 0.5 percentage points from the original plan. This move is interpreted as a response to the improved funding environment due to the recent decline in market interest rates and concerns that the loan's interest rate competitiveness is not high compared to general mortgage loans from banks.

Korea Housing Finance Corporation (HF) announced on the 26th that from the 30th, the Special BoGeumJaRi Loan interest rates will be applied at 4.25% to 4.55% per annum for the general type and 4.15% to 4.45% per annum for the preferential type, accepting applications accordingly. These rates reflect market interest rates and have been lowered by 0.5 percentage points from the original schedule.

The Special BoGeumJaRi Loan is a product operated temporarily for one year by integrating the Safe Conversion Loan and Qualified Loan to reduce the interest rate fluctuation risk for low-income and real demand borrowers during a period of rising interest rates. It has attracted attention because it allows applications up to 500 million KRW without income restrictions for housing prices up to 900 million KRW.

Accordingly, for the general type with housing prices up to 900 million KRW and no income restrictions, an interest rate of 4.25% (10 years) to 4.55% (50 years) per annum applies, while the preferential type for housing prices up to 600 million KRW and income up to 100 million KRW can be used at a rate 0.1 percentage points lower, from 4.15% to 4.45% per annum. Additionally, applying through the electronic contract method (Akkim e) online grants an extra 0.1 percentage point interest rate discount.

Furthermore, HF explains that for the preferential product, additional preferential interest rates are available for low-income youth (0.1 percentage points), newlywed households (0.2 percentage points), and socially disadvantaged groups (0.4 percentage points), allowing use at even lower rates. Including these preferential rates, the minimum interest rate ranges from 3.25% to 3.55% per annum.

Also, to reduce the cost burden for borrowers switching existing loans to the Special BoGeumJaRi Loan, early repayment fees on existing loans are waived. No early repayment fees will be charged even if the Special BoGeumJaRi Loan is repaid early.

Meanwhile, applications for the Special BoGeumJaRi Loan can be made from 9 a.m. on the 30th via the HF website or the Smart Housing Finance application. From the 31st, applications can be submitted from 3 a.m. to midnight daily, including weekends and holidays. If applicants agree to automated document submission (scraping service) and use of administrative information, they can conveniently use the loan without submitting separate documents. If online application is difficult, SC First Bank counters can be used; however, in this case, the Akkim e interest rate discount (0.1 percentage points) does not apply.

Choi Jun-woo, President of HF, stated, "After announcing the Special BoGeumJaRi Loan launch plan, we decided to lower the interest rate by reflecting the reduction in MBS funding costs due to the decline in government bond yields." He added, "We hope that more low-income and real demand borrowers will use the Special BoGeumJaRi Loan to reduce their housing cost burden during this period of rising interest rates."