Apartments Under 900 Million KRW and 85㎡
Minimum Interest Rate of 1.6% Applied
Preferential Interest Rate for Additional Childbirth
A system that provides housing purchase loans of up to 500 million KRW at a minimum interest rate of 1.6% to non-homeowning households who have given birth within the past two years will be implemented starting January 29 next year.
On the 14th, citizens are browsing booths at the KOBE Baby Fair held at COEX in Gangnam-gu, Seoul. This exhibition, where you can see everything from maternity products to early childhood education at once, continues until the 17th. Photo by Mun Ho-nam munonam@
On the 27th, the Ministry of Land, Infrastructure and Transport announced that following the approval of the National Assembly budget review and consultations with related ministries, the 2024 Housing and Urban Fund Operation Plan has been finalized, and special loans for newborns’ housing purchase and jeonse funds, as well as expanded support for youth monthly rent loans, will be implemented.
To qualify for the special newborn loan, the applicant must be a non-homeowning household head who has given birth within two years as of the loan application date. This applies to births from January 1 onward, and couples who have given birth without registering their marriage are also eligible. Fetuses during pregnancy are not included.
Eligibility for housing purchase fund support requires a combined annual income of the couple to be 130 million KRW or less and to meet the net asset holding requirement (46.9 million KRW). Loans of up to 500 million KRW can be obtained at a minimum interest rate of 1.6%. Refinancing loans are also supported for households owning one home.
The target housing price for housing purchase fund support must be 900 million KRW or less, with an exclusive area of 85㎡ or less (100㎡ or less in eup/myeon areas). The loan limit is up to 500 million KRW, and the maximum loan term is 30 years.
If there are existing children (born more than two years ago), a preferential interest rate of 0.1%p is applied. Additionally, if more children are born, preferential interest rates apply and the special loan period is extended. The interest rate is reduced by 0.2%p per child, and the special loan period is extended by 5 years. For one child, the interest rate is 1.6?3.3% (5 years), for two children 1.4?3.1% (10 years), and for three or more children 1.2?2.9% (15 years).
For example, if the first child was born in January 2023 and the second child is born in December next year, the preferential interest rate is reduced by 0.2%p, and the special interest rate application period is extended by 5 years.
If a couple gave birth to their first child in January 2022 and their second child in December 2023, and they apply for a loan in February next year, a preferential interest rate of 0.1%p is applied. This is because only the second child is considered under the newborn special loan.
A Ministry of Land official explained, "If a child is born before the special loan period expires, preferential interest rates are applied for the additional newborns, and the special interest rate application period can be extended. If a child is born after the special loan period expires, the interest rate reverts to the existing special rate, and preferential interest rates and special interest rate application period extensions can be applied for the additional newborns."
The asset conditions for jeonse loan support require a combined annual income of 130 million KRW or less and net assets of 345 million KRW or less. Loans of up to 300 million KRW can be obtained for housing with a deposit of 500 million KRW or less (400 million KRW or less in non-metropolitan areas) and an exclusive area of 85㎡ or less. The loan must be repaid at the end of the jeonse contract, and the loan maturity can be extended up to five times, allowing the loan to be maintained for up to 12 years.
The special interest rate for jeonse loans ranges from 1.1% to 3.0% depending on income and deposit amount and is supported for four years. If the annual income is 75 million KRW or less, when the special interest rate period ends, the interest rate increases by 0.4%p; if income exceeds 75 million KRW, the lowest monthly interest rate among commercial banks is applied.
Special loans can be applied for at five banks handling housing fund loans?Woori, Kookmin, Nonghyup, Shinhan, and Hana Banks?as well as through the Fund e-Ddeunddeun website.
Additionally, support for monthly rent loans to ease youth housing cost burdens will be strengthened. The "Monthly Rent Deposit Loan for Youth Employed in Small and Medium Enterprises," which was scheduled to end at the end of the year, will be extended until the end of next year. When extending jeonse loans, principal repayment can be deferred once.
The youth-guaranteed monthly rent loan and housing stability monthly rent loan will have expanded eligibility and limits. Previously, the deposit requirement for the youth-guaranteed monthly rent loan was up to 50 million KRW; this will increase to 65 million KRW, and the deposit loan limit will increase from 35 million KRW to 45 million KRW. The housing stability monthly rent loan limit will expand from 400,000 KRW to 600,000 KRW. Previously, repayment was only possible as a lump sum at the end of the monthly rent contract, but from March next year, installment repayment within up to 8 years will be possible.
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