Monthly JooTaekYeonKeum Reverse Mortgage Payments to Change for New Applicants

Starting February

- A move to reflect recent changes in life expectancy, speed of housing price inflation, and interest rate trends

- Monthly payments to increase slightly for borrowers in their early 60s; to decrease slightly for borrowers in their mid-60s or above

□ Parameters for the calculation of monthly payments to be modified as of February 1, 2012

- Housing price inflation rate to be adjusted slightly downward, life expectancy slightly upward

Monthly pension payments under the JooTaekYeonKeum (JTYK: reverse mortgage) program will change as of February 1 for new borrowers. Existing borrowers, however, will receive the same monthly payments as before.

Korea Housing Finance Corporation (HF, CEO Seo Jong-dae) announced on January 16 that it would apply modified parameters to calculate JTYK monthly payments from February onwards.

Based on a review of current parameters commissioned to an external agency, HF decided to lower the long-term housing price inflation rate from 3.5% to 3.3%, to adjust the interest rate applied to calculate monthly payments from 7.12% to 6.33%, and to replace the 2005 life table that is currently in use with the 2010 life table.

Nevertheless, the actual interest rate applied to the loan balance will remain the same: a variable rate equal to the 91-day CD rate plus 1.1%.

□ No changes in the monthly payments to existing borrowers

The parameter changes do not affect existing borrowers, who will continue to receive the same monthly payments stipulated in their original contracts.