'Online Home Mortgage Refinancing' Average 1.5%P Reduction, Saved 3.37 Million Won

It has been reported that within four days of the launch of the non-face-to-face apartment mortgage refinancing service, more than 10 borrowers have saved an average interest rate of 1.5 percentage points, reducing their annual interest payments by approximately 3.37 million KRW.

The Financial Services Commission announced on the 14th that as of the 12th, a total of 5,657 borrowers had completed new mortgage loan applications through the refinancing service. The total amount of newly applied loans reached 1.0307 trillion KRW.

On the 21st, a notice about personal credit loan interest rates is posted at a commercial bank in Seoul. Photo by Kang Jin-hyung aymsdream@

Among them, 83 borrowers have completed loan screening by financial institutions and signed new loan agreements. The total loan amount for these agreements is estimated at 16.2 billion KRW. Furthermore, 16 borrowers have completed the refinancing process, where the new lending financial institution repaid the existing loan according to the loan agreement. The loan amount for these cases is 3.6 billion KRW. The average interest rate reduction for these borrowers is 1.5 percentage points, resulting in an annual interest savings of about 3.37 million KRW per person.

Since the loan screening by the financial institution takes about 2 to 7 business days after the borrower applies for refinancing, actual loan transfers are expected to begin in earnest from next week.

In a major refinancing case, Mr. A took out a loan in October 2018 using an apartment as collateral at an interest rate of 6.2% per annum (mixed type, 5-year fixed, 30-year maturity). Through this refinancing service, he moved to a 3.8% interest rate (mixed type, 5-year fixed, 20-year maturity). The loan amount was 270 million KRW, and his monthly principal and interest repayment decreased by 130,000 KRW.

The financial authorities will also launch a jeonse loan refinancing service on the 31st. The Financial Services Commission stated, "Once the refinancing service for jeonse loans, a major housing finance product for low-income and actual demand borrowers, is launched, it will help reduce the housing finance cost burden for more financial consumers."