From Today, Multi-Homeowners Can Also Get Mortgage Loans in Regulated Areas

From today (the 2nd), mortgage loans for multi-homeowners in regulated areas will be allowed.

The Financial Services Commission announced that it held a regular meeting on the same day and approved amendments to the supervisory regulations for five financial sectors, including banking, focusing on the implementation of measures to normalize mortgage loan regulations. The amended regulations will take effect immediately after the Financial Services Commission's approval.

According to the amended regulations, mortgage loans for multi-homeowners in regulated areas, which were previously not allowed, will now be permitted up to a loan-to-value ratio (LTV) of 30%. In non-regulated areas, the existing LTV of 60% will continue to apply.

Mortgage loans for housing rental and sales businesses, which had been blocked in all areas, will also be allowed. The LTV limit is 30% in regulated areas and 60% in non-regulated areas.

All restrictions related to mortgage loans for the purpose of returning tenant deposits will be abolished. The loan limit of 200 million KRW for apartments exceeding 1.5 billion KRW in speculative and speculative overheated areas, which applied to loans for deposit returns, will be removed.

The loan limit for mortgage loans for living stabilization funds, which was up to 200 million KRW per year, will also be abolished.

The measure to apply the Debt Service Ratio (DSR) standard based on the original loan date rather than the refinancing date when refinancing existing debt will be temporarily applied for one year. However, increases in loan amounts will not be allowed.

For low-income and genuine demand borrowers, the mortgage loan limit of 600 million KRW for home purchases in regulated areas will also be abolished. The criteria for low-income and genuine demand borrowers remain the same: combined annual income of the couple below 90 million KRW, no home ownership in the household, and housing price below 900 million KRW in speculative and speculative overheated areas (below 800 million KRW in adjusted target areas), all of which must be met.

However, the Financial Services Commission explained that the fundamental principle that loans are possible only within the LTV and DSR limits remains unchanged despite these regulatory relaxations.