- Stress DSR Phase 3 to Take Effect in July... Mortgage Limits in the Seoul Metropolitan Area Expected to Drop by Tens of Millions of Won
- Group Loans for Complexes Announced Before June 30... Current Additional Interest Rates to Remain
With the government set to implement the third phase of the stress DSR starting July 1, the burden of homeownership for first-time buyers without homes is expected to increase, especially in the Seoul metropolitan area. Concerns are rising that the reduction in loan limits will further burden these buyers, leading to expectations that demand will concentrate on new housing complexes that are not affected by the new lending regulations.
The stress DSR is a system that reduces the maximum loan amount by adding a stress interest rate (an additional rate) when assessing a borrower's repayment ability, in anticipation of the increased repayment burden that may result from rising interest rates during the loan period. It was introduced to minimize the risks of future interest rate fluctuations and household debt.
In September of last year, the second phase of the regulation was implemented, applying a stress interest rate of 1.2% to household loans in the Seoul metropolitan area and 0.75% to those outside the metropolitan area. As an extension of this, the third phase, which will apply a stress interest rate of 1.5% to all household loans, will take effect on July 1.
Industry experts predict that the implementation of the third phase DSR will significantly reduce the limit on mortgage loans. As loan thresholds rise, there are growing concerns that homeownership will become even more difficult starting in July.
According to a simulation by financial authorities, when the third phase is introduced, the maximum 30-year mortgage loan available to a borrower living in the Seoul metropolitan area with an annual income of 100 million won will decrease by 20 million won, from 590 million won under the second phase to 570 million won.
Given this situation, the market is seeing increased activity from buyers seeking complexes that can avoid these loan regulations. In particular, in the presale market, attention is being drawn to the fact that complexes with resident recruitment announcements made by June 30, 2025, will not be subject to the third phase DSR regulation. As a result, more buyers are revisiting previously announced complexes.
An industry insider said, "With new housing supply shrinking and loan limits being reduced, there is a growing sentiment among real buyers with limited cash reserves that 'if not now, it will be difficult to buy a home.' As a result, there is likely to be a rush of last-minute demand before the third phase DSR is implemented. To avoid this, buyers are turning to previously announced presale complexes, leading to rapid contract signings for key properties."
Amidst this, Lotte Engineering & Construction is currently offering Icheon Lotte Castle Central Peraz Sky on a first-come, first-served basis.
This complex is the third Lotte Castle project in the area, following Icheon Lotte Castle Gold Sky and Icheon Lotte Castle Peraz Sky. Together, these developments will form a large-scale Lotte Castle brand town with a total of 2,068 units.
Icheon Lotte Castle Central Peraz Sky will consist of three buildings, with 801 apartment units and 52 officetel units, ranging from six basement levels to 49 above-ground floors. The apartments are divided into 267 units of type 84A, 267 units of type 84B, 224 units of type 84C, and 43 units of 122 square meters.
To the north of Icheon Lotte Castle Central Peraz Sky is Icheon Oncheon Park, while to the south flows Junglichen Stream, creating a natural environment with both mountains and water. A riverside park has been established along Junglichen Stream to the south, and there are many natural amenities nearby, including Anhungji, Anhung Recreation Area, and Icheon Oncheon Park, offering residents a premium natural environment.
The complex is located within walking distance of Anhung Elementary School, Icheon Middle School, and Icheon Jeil High School, providing convenient access to primary, middle, and high schools. There is also a wealth of educational infrastructure, including a city library, a city museum, a planned youth cultural center, and the newly designated Icheon Gyeonggi Science High School.
To reduce the financial burden on buyers, Icheon Lotte Castle Central Peraz Sky has lowered the threshold for homeownership by offering a 5% down payment and a fixed first installment of 5 million won, payable until move-in.
A sales representative stated, "Currently, the 122-square-meter units are sold out, and for the 84-square-meter units, buyers can select their preferred building and unit without a subscription savings account."
The expected move-in date for Icheon Lotte Castle Central Peraz Sky is September 2027, and the model home is located in Jinri-dong, Icheon, Gyeonggi Province.
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