Applications Accepted at Bank Branches Nationwide Starting January 31 Next Year
The banking sector will implement a principal repayment deferment program for mortgage loans (bank-originated mortgages) for employees on parental leave. This initiative aims to ease the temporary financial burden on borrowers whose repayment obligations increase due to parental leave and to help address the low birth rate issue.
The banking sector has developed a joint set of detailed implementation measures through discussions and plans to launch the program on January 31 next year, after completing the necessary IT development at each bank. Eligible applicants can apply at their local bank branches nationwide after the program's launch date. To qualify, either the borrower or the borrower's spouse must be on parental leave as of the application date. The program applies to borrowers who own a single home with a market value of 900 million won or less at the time of application, and whose mortgage loan has been in place for at least one year since disbursement.
Applicants must submit documentation verifying their leave status, such as a 'parental leave certificate' from their employer. The document must specify the leave period and confirm that the applicant is actually on parental leave as of the application date. The initial deferment of principal repayment is available for up to one year. If parental leave continues before the end of the deferment period, it can be extended for up to two additional years, in one-year increments, for a maximum total deferment period of three years.
The Korea Federation of Banks stated, "We expect this program to alleviate the financial burden on parents during parental leave and help create a more stable environment for childrearing. The banking sector will continue to fulfill its social responsibility by making ongoing efforts to address social issues such as the low birth rate."
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