‘Refinancing Mortgage Loans’ Boom... Government Considers Increasing Handling Limits

Current Monthly Limit of 160 Billion KRW and Annual Limit of 2 Trillion KRW per Bank
Applications Exceed 1 Trillion KRW Four Days After Launch
Trend Monitoring Underway to Consider Expanding Handling Limits
Jeonse Loan Refinancing Service to Start from the 31st

On the 8th, one day before the launch of the mortgage refinancing service through the mortgage loan transfer intermediary system, an on-site inspection of the refinancing loan infrastructure was held at the Financial Settlement Center Bundang Center in Seongnam City. Yoo Ui-dong, Chairman of the Policy Committee of the People Power Party (left), Kim Ju-hyun, Chairman of the Financial Services Commission (center), and Park Jong-seok, President of the Financial Settlement Service, are listening to an explanation of the system in the integrated control room. Photo by Heo Young-han younghan@

As the mortgage refinancing service continues to gain popularity since its launch, the government is considering gradually raising the current handling limit of 2 trillion won per bank.

According to the financial sector on the 19th, financial authorities, noticing that the mortgage refinancing service, which started on the 9th, received applications exceeding 1 trillion won within just four days of its launch, are monitoring the trend and planning to review whether to expand the handling limits for each bank.

Currently, banks offering the mortgage refinancing service provide it within an annual limit of 2 trillion won, based on an average monthly new mortgage loan amount of 160 billion won over the past three years. A financial authority official stated, "Since this is a loan refinancing service, it does not increase household debt, and considering the policy intent, there seems to be no strong reason to strictly limit the handling limit," leaving the possibility open.

Through the mortgage refinancing service, existing borrowers can enjoy an average interest rate reduction of 1.5 percentage points. As a result, within four days of launch, 5,657 borrowers applied for refinancing worth 1.0307 trillion won. If this initial trend continues, it is highly likely that the handling limits per bank will be exceeded early. Additionally, a jeonse loan refinancing service will begin on the 31st.

Competition among lending banks is expected to intensify further. KakaoBank is actively attracting borrowers by waiving fees, while Naver Pay is running an event until the 29th of next month, offering up to 210,000 won in points just for comparing mortgage loan interest rates.

In fact, as of the 16th, Naver Pay recorded 22,000 mortgage loan comparisons amounting to a total of 3.95 trillion won. Among these, 9,400 cases proceeded to the financial institution application stage, totaling 1.66 trillion won.

Meanwhile, the lower end of mortgage refinancing product interest rates at major banks such as KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup ranges from 3.61% to 3.65% per annum. Regional banks and internet-only banks competing with major banks offer even lower rates. Among internet-only banks, KakaoBank offers an interest rate of 3.42% per annum, and K Bank offers 3.50%. Among regional banks, Daegu Bank's mortgage refinancing product has the lowest rate at 3.10% per annum.