Starting Tomorrow, Apartment Mortgage Loans Can Also Be Transferred at Once via App

Financial Services Commission Expands Online One-Stop Debt Consolidation Loans
to Mortgage and Jeonse Deposit Loans

From now on, apartment mortgage loans and jeonse deposit loans can also be easily refinanced through an online, one-stop refinancing loan infrastructure, just like unsecured loans.

On the 23rd, as domestic market interest rates and bank loan interest rates rapidly rise, a banner displaying loan interest rates is hung on the exterior wall of a commercial bank in Seoul. Photo by Jinhyung Kang aymsdream@

The Financial Services Commission announced on the 8th that starting from the 9th, refinancing services through the online, one-stop refinancing loan infrastructure will be expanded to include mortgage loans and jeonse deposit loans. Apartment mortgage loans will be available from the 9th, and jeonse deposit loans from the 31st.

Previously, the authorities built a refinancing loan infrastructure to reduce citizens' interest burdens by promoting digital transformation in finance and market competition, and have been providing refinancing services for unsecured loans since the end of May last year.

As a result of operating the unsecured loan refinancing service for about seven months since the end of May last year, a total of 105,696 borrowers moved to loans with relatively lower interest rates. The total amount moved was about 2.3778 trillion KRW. Borrowers who refinanced saw an average interest rate reduction of 1.6 percentage points, resulting in an annual interest saving of 540,000 KRW. Their credit scores also increased by an average of 35 points (KCB standard).

In particular, since the launch of the unsecured loan refinancing service, the proportion of borrowers from the secondary financial sector who refinanced unsecured loans through the refinancing loan infrastructure was about 22% as of the end of last year. The authorities expect that more financial cost savings and credit improvement effects will occur through the refinancing loan infrastructure in the future.

The refinancing loan infrastructure consists of a 'loan comparison platform' where borrowers can check their existing loans and compare refinancing loan products, financial companies that provide new products for refinancing in cooperation with the borrower's existing loan-holding financial institutions, and the Korea Financial Telecommunications & Clearings Institute's 'loan transfer mediation system' that intermediates information between the loan comparison platform and financial companies and automates loan repayment processing.

Borrowers who want to refinance mortgage or jeonse loans can use the loan comparison platform to check existing loans and access new loan services every business day from 9 a.m. to 8 p.m. However, since existing loan inquiries are conducted through MyData, those not registered with MyData must complete the registration process first.

Once the borrower selects a refinancing product, they can apply for a new loan review through the financial company's application or branch. Most required documents, such as income verification, are checked by the financial company via public MyData and web scraping methods, so separate submission is not necessary. Documents like the housing purchase contract, registration certificate, and jeonse lease contract should be photographed and submitted remotely. Elderly borrowers or those who find it difficult to submit documents remotely can visit branches in person.

When a borrower applies for a loan, the new loan financial company conducts a review over 2 to 7 days and notifies the borrower of the results via text message or other means. Afterward, the borrower confirms the loan terms through the financial company's app or branch and signs the loan contract, completing the refinancing process.

The loans eligible for refinancing are apartment mortgage loans secured by apartments with a market price of up to 1 billion KRW, as verified by sources such as KB Real Estate Price, and guaranteed jeonse deposit loans. To limit excessive loan transfers, apartment mortgage loans can only be refinanced after six months from the original loan date, and jeonse loans can be refinanced after three months and before half of the jeonse lease contract period has elapsed.

Refinancing is also possible when renewing a jeonse lease contract. In this case, new loan applications can be made from two months to 15 days before the expiration of the existing jeonse contract, considering the timing of the lease renewal. For jeonse loans, refinancing is only possible with guaranteed loans from the same guarantor institution that provided the guarantee for the existing loan.

Participants in the refinancing loan infrastructure for apartment mortgage loans include 18 banks, 10 insurance companies, and 4 secondary financial institutions. For jeonse loans, 18 banks and 3 insurance companies (Samsung Life Insurance, Samsung Fire & Marine Insurance, Lotte Insurance) participate.

Financial consumers can check existing loans and compare refinancing loan conditions through 7 loan comparison platforms and 16 financial company apps for mortgage loans, and through 4 loan comparison platforms and 14 financial company apps for jeonse loans. The authorities plan to require these platforms to disclose brokerage fee rates on their websites to ensure that brokerage fees charged by financial companies are not passed on to consumers.

Meanwhile, the authorities have also prepared risk management measures to prevent the expansion of the refinancing loan infrastructure from contributing to household debt growth. When refinancing apartment mortgage or jeonse loans, increased refinancing is not allowed, and the new loan limit is restricted to the remaining balance of the existing loan. However, if the jeonse deposit increases upon lease renewal, an increase in the limit corresponding to the deposit increase is permitted. Additionally, the maturity of the new loan can be set within the agreed maturity of the existing loan during refinancing.

A financial authority official stated, "To prevent rapid movement of loan assets between financial companies, we will set handling limits for mortgage loans through the refinancing loan infrastructure for each participating financial company and closely monitor the use of the refinancing loan infrastructure in cooperation with the Korea Financial Telecommunications & Clearings Institute and industry associations."