HF launches a five-year adjusted-rate conforming loan

- A loan worth up to 400 million Korean won is extended for housing equivalent to 600 million Korean won or less
- The interest rate for the new conforming loan is around 0.5%p lower than that of existing conforming loans

Korea Housing Finance Corporation (HF) announced on the 24th that the Adjusted-Rate Conforming Loan, whose interest rate is adjusted every five years, will be launched via Woori Bank and Standard Chartered Korea* starting from the 25th.
* The product will be launched at Standard Chartered Korea on June 30th.

For the first five years, this product offers a 0.5%p lower interest rate than the conventional standard type of conforming loan**; then every five years, the rate is reset to be 0.1%p lower than HF’s interest rate for the u-Bogeumjari Loan. A loan worth up to 400 million Korean won can be made for housing equivalent to 600 million Korean won or less.
** A conforming loan refers to a housing loan that meets predefined loan conditions and can thus be easily securitized to provide resources for financial institutions to tap into in financing long-term fixed-rate home loans.

“The adjusted-rate conforming loan has been able to offer a competitive interest rate as both HF and the banks cut their respective commissions,” explained one HF official. “The interest rate for customers will likely be around the mid-to-high three percent mark.”

He went on to say: “This product will provide a wider range of choices for would-be customers who wish to make long-term fixed-rate mortgage loans yet remain hesitant due to relatively high interest rates. At the same time, it will help expand the share of fixed-rate amortized mortgage loans in the portfolio of financial institutions.”