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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] SEOUL, Oct. 15 — The South Korean government has unveiled new housing finance regulations that will reduce mortgage loan limits for homes in the Seoul metropolitan area and other regulated zones, tightening access to credit based on property prices.
Under the new measures, homes valued at 15 billion won (approx. USD 11 million) or less will retain the existing maximum mortgage limit of 6 billion won. However, for properties exceeding 15 billion won, the limit will be reduced to 4 billion won, and for those above 25 billion won, it will be further lowered to 2 billion won.
In addition, the stress interest rate used to calculate the Debt Service Ratio (DSR) for apartment purchases in the Seoul metropolitan area will rise from 1.5% to 3%. The DSR rule — which restricts borrowing based on a borrower's income and total debt obligations — will now also apply to jeonse (lease deposit) loans for owners of a single home.
The government announced the “October 15 Housing Market Stabilization Measures” at a ministerial meeting chaired by the Deputy Prime Minister and Minister of Economy and Finance, attended by the Minister of Land, Infrastructure and Transport and the Chairman of the Financial Services Commission.
Following the meeting, the Financial Services Commission held an emergency household debt review meeting with the Bank of Korea, the Korea Federation of Banks, five major commercial banks, and secondary financial institutions to discuss implementation details.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
