"Interest Rate Switch Option Bogeumjari Loans" Launched on November 12

  On November 12, KHFC will launch a new type of bogeumjari loan product, which allows borrowers to switch to a fixed interest rate at a time of their choosing within the first three years.

  In order to broaden the choices available to mortgage loan customers and expand the base for long-term, fixed-rated loan products, KHFC announced that it would begin sales of "Interest Rate Switch Option Bogeumjari Loans", which carry an option to switch to a fixed-rate interest rate system.

  During up to a 3-year grace period, a floating interest rate linked to the CD rate is applied of this product. However, the borrower can switch to a fixed rate system at any time of his or her or her choice or it automatically shifts to a fixed rate upon the expiring of this initial period.

  The interest rate during the initial period is set at a premium of 1.2 percentage points over the secondary market CD (91-day) yield as announced by the Korea Securities Dealers Association on the previous business day.

  The new product has three maturities: 15, 20 and 30 years. A loan to value ratio (LTV) of up to 60% is allowed. Other conditions, including the loan repayment scheme, early repayment penalties, and the debt-to-income ratio (DTI), are the same as on the current bogeumjari loans.