During Interest Rate Hikes, 'Fixed-Rate and Ultra-Long-Term Mortgage Loans' Preferred

Housing Finance Corporation Announces Results of '2022 Housing Finance and Bogeumjari Loan Survey'

The Korea Housing Finance Corporation announced the results of the '2022 Housing Finance and Bogeumjari Loan Survey,' conducted together with a professional research institute to understand the public's use of housing finance, on the 5th.

The proportion of respondents who answered that 'one household, one home for actual residence is essential' (70.3%) slightly increased compared to the previous year (65.3%). The proportion of those who responded that they 'intend to purchase a home in the future' (38.0%) was similar to the previous year (37.2%). The housing finance usage rate (37.5%) was also similar to the previous year (38.3%). The intention to purchase a home and the use of housing finance were maintained.

When using mortgage loans, interest rate levels and loan limits were considered the highest priority, followed by whether the interest rate is fixed or variable, and then the loan maturity period. In future mortgage loan use, fixed interest rates (49.0%) were preferred over variable interest rates (16.9%). The biggest reason for preferring fixed interest rates was 'because even if market interest rates rise, the low loan interest rate can be maintained' (35.2%).

Even when fixed interest rates were 1.0 percentage point higher than variable rates, preference for fixed interest rates increased significantly. Additionally, when the interest rate difference between fixed and variable rates narrowed from 1.25 percentage points to within 1.0 percentage point, the preference for fixed interest rates increased significantly, and when the difference was within 0.5 percentage points, most variable rate users shifted to fixed rates.

The intention to use ultra-long-term Bogeumjari Loans with a loan maturity of 40 years or more for youth and newlyweds was 44.4%. The biggest reason for wanting to use it was 'because the monthly principal and interest repayment burden is reduced' (53.4%). Furthermore, the intention to use the Youth Jeonse Deposit Guarantee, which applies preferential guarantee limits compared to general products for non-homeowning youth households, was 55.6%, up from 45.8% the previous year.

According to this survey, the proportion of respondents satisfied with Bogeumjari Loans and Didimdol Loans for home purchase increased by 5.1 percentage points from the previous year to 94.5%, marking an all-time high. Along with satisfaction, the willingness to recommend these products to others also increased by 2.8 percentage points from the previous year to 89.6%.

The biggest reason for satisfaction was that 'interest burden does not increase even if market interest rates rise.' This was followed by 'trust in the product because it is from a public institution,' 'the ability to repay the loan principal in fixed monthly installments,' and 'the possibility of loan use for up to 40 years.'

The proportion of respondents who said that the reduced principal and interest burden from using ultra-long-term Bogeumjari Loans helped household finances was also 92.4%. The amount reduced by the decrease in principal and interest burden was mainly used for living expenses (food, housing, taxes, communication fees, etc.) (72.7%).