About 200,000 borrowers refinanced loans totaling approximately 10 trillion KRW within one year of the launch of the "Loan Refinancing" service, achieving an average annual interest savings of 1.62 million KRW. In response, financial authorities plan to expand the service scope beyond existing mortgage, jeonse (lease deposit), and credit loans to include villa and residential officetel mortgage loans with real-time price inquiry capabilities, aiming to implement this expansion by September.
On the morning of the 29th, the Financial Services Commission held a "User and Participating Institution Practitioners Meeting" at Front1 in Mapo, Seoul, to mark the first anniversary of the Loan Refinancing service launch, attended by Financial Services Commission Chairman Kim Joo-hyun. In addition to Chairman Kim, presidents and vice presidents of major commercial banks (KB Kookmin, Shinhan, Hana, Woori) and representatives from institutions participating in the Loan Refinancing service were present.
During the meeting, discussions were held regarding the planned Loan Refinancing service for residential officetel and villa (row house/multi-family) mortgage loans with real-time price inquiry capabilities, targeted for implementation in September. Currently, the KB Price Index, which financial institutions typically use as a benchmark for collateral housing prices, is limited to apartments and officetels with 50 or more households whose actual transaction prices can be verified. Expanding this to include apartments with fewer than 50 households and villas (row house/multi-family) was proposed. KB Kookmin Bank is currently verifying the appropriateness of the KB Price Index for apartments and villas with fewer than 50 households.
The 'Mortgage Refinancing' service through an online, one-stop refinancing loan infrastructure surpassed 10,000 applicants within 15 days of its launch, with the application amount approaching 1.8 trillion won. The photo shows an ATM of a commercial bank installed in Yongsan-gu, Seoul, on the 25th. Photo by Jinhyung Kang aymsdream@
Lee Jae-geun, President of KB Kookmin Bank, stated, "Currently, KB Kookmin Bank provides the KB Price Index only for apartments and officetels with 50 or more households, but we plan to extend this to apartments and villas with fewer than 50 households using artificial intelligence (AI) price estimation technology." He added, "If the scope of the KB Price Index expands, the range of loans eligible for the online mortgage refinancing service will also increase."
Financial authorities expect that if KB Kookmin Bank expands the KB Price Index coverage, the service provision scope will broaden. With the existing apartment mortgage refinancing, small or single-unit apartments with fewer than 50 households can be refinanced, and with the upcoming villa and officetel mortgage refinancing service scheduled for September, villas newly included in the KB Price Index will also become eligible for refinancing.
The meeting also included discussions on the achievements and improvement plans marking the first anniversary of the Loan Refinancing service. According to financial authorities, since the credit loan refinancing service was first introduced in May last year, followed by mortgage and jeonse loan refinancing services launched in January this year, a total of 202,461 borrowers have used the Loan Refinancing service over the past year. The total loan transfer amount was 10.1058 trillion KRW, with an average interest rate reduction of 1.52 percentage points and an average annual interest savings of 1.62 million KRW per borrower.
Breaking down by loan type, the credit loan refinancing service, introduced first, saw 168,254 borrowers transfer 3.9727 trillion KRW in loans, with an average interest rate reduction of 1.57 percentage points and an average interest savings of 580,000 KRW per borrower. Mortgage loan refinancing involved 24,721 borrowers transferring 4.54 trillion KRW, with an average interest rate reduction of 1.49 percentage points and an average interest savings of 2.73 million KRW per borrower. For jeonse loans, 9,486 borrowers transferred 1.5931 trillion KRW, with an average interest rate reduction of 1.40 percentage points and an average interest savings of 2.35 million KRW per borrower.
Woori Bank also revealed plans to operate a "Visiting Loan Refinancing Service" during the meeting. This is a face-to-face consultation service targeting customers aged 65 and older. If a borrower selects "Apply in person" on the app screen during non-face-to-face refinancing, a preliminary phone consultation is conducted, and a loan agent visits the borrower's home to assist with the non-face-to-face refinancing process. After the review is completed, the loan agent visits again to finalize the contract, while repayment of existing loans and cancellation or establishment of mortgage rights are processed automatically.
The authorities plan to continue improving the refinancing service. Starting from the 3rd of next month, the period during which jeonse loans can be refinanced will be extended. Previously, refinancing was only possible before half of the jeonse lease period had elapsed, but from the 3rd, refinancing will be allowed up to six months before the end of the jeonse lease period. For credit loans, operating hours will be extended from 9 a.m. to 4 p.m. to 9 a.m. to 10 p.m. starting on the 3rd.
Additionally, the Financial Services Commission will continue consultations with participating and related institutions to promote the expansion of the service scope to villas and officetels with price inquiry capabilities by September. Chairman Kim said, "Beyond simply offering lower interest rates, there are various ways to enhance user benefits through the Loan Refinancing service, and going forward, financial companies that meet these user expectations will gain competitiveness." He added, "We hope that the accessibility and inclusiveness of Loan Refinancing will improve so that elderly customers who find non-face-to-face applications difficult and low-income or owner-occupant borrowers with villa mortgage loans without real-time price information can use the service more conveniently."
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