10-YR Bogeumjari Loan Rate Upped to  2.90%

- For applications filed from October 1 onward, a 0.1%-point rate increase applies

Korea Housing Finance Corporation (HF, CEO Kim Jae-Chun) announced on the 22nd that it will raise the rate of its long-term, fixed rate, amortized Bogeumjari Loan by 0.1%-points starting from October 1, 2017.

With the rate increase, the rates of ‘u-Bogeumjari Loan,’ a mortgage loan offered through the HF webpage, and ‘t-Bogeumjari Loan’ available at commercial banks will be in the range of 3.00% (10-year term) to 3.25% (30-year term). The rates of ‘Akkim e-Bogeumjari Loan,’ which offers a 0.10%-point rate reduction thanks to its online loan agreement system, will be in the range of  2.90% (10-year term) to 3.15% (30-year term).

The interest rates before the increase will apply to those who have subscribed to the Bogeumjari Loans through the end of September.

Bogeumjari Loans are offered to couples whose combined annual income is KRW 70 million or less. In addition, a 0.4%-point rate discount is offered for socially underprivileged households with an annual income of KRW 60 million or less (including single-parent and multicultural families or families with three or more children or those with disabilities).

An HF official said of the rate increase, “Despite the rapid increases in market rates, we have kept the Bogeumjari Loan rates unchanged since March to ease the burden on low- to middle-income households. But, as funding costs have exceeded yields on interest for a long period of time, we have suffered a reverse margin. This makes raising our rates inevitable. However, we minimized the rate increase so as not to give too much of a burden on the customers.”

He also went on to say, “Despite the interest rate increase, the Bogeumjari Loan rates are significantly lower than those of mortgage loans offered by commercial banks. We will set our interest rates in consideration of overall market conditions to minimize the repayment burden of low-income families.”