"Stopping Gap Investments"... Shinhan Bank to Suspend Conditional Jeonse Loan from the 26th

As household loans surged, banks have started to suspend jeonse loan services.

According to the financial sector on the 21st, Shinhan Bank decided to temporarily stop handling conditional jeonse loans, which were recently allowed under conditions such as transfer of ownership to the landlord (buyer), cancellation or reduction of senior claims, or disposal of the house, starting from the 26th.

A Shinhan Bank official explained, "This reflects concerns that jeonse loans have recently been used for speculative loans such as gap investments (purchasing houses with jeonse deposits). This is a measure for proactive management of household debt."

From the same day, Shinhan Bank also decided to suspend the Plus Mortgage Loan (MCI·MCG). MCI·MCG is insurance purchased simultaneously with a mortgage loan.

Along with this, the interest rates for mortgage loans and jeonse loans will be raised by up to 0.4 percentage points starting from the 23rd. Mortgage loan rates (for new purchases and living stabilization) will increase by 0.20 to 0.40 percentage points depending on the benchmark interest rate. Jeonse loan rates will rise by 0.10 to 0.30 percentage points depending on the guarantee institution.

Previously, Shinhan Bank raised the benchmark interest rates for 3-year and 5-year bank bonds by 0.05 percentage points each on the 15th and 22nd of last month, and also increased mortgage loan rates by up to 0.3 percentage points on the 29th. On the 7th, 16th, and 21st of this month, mortgage loan rates were further raised by up to 0.3 percentage points, 0.5 percentage points, and 0.1 percentage points, respectively.