HF adjusts Home Pension monthly payments for applicants from February
- Slight increase in the average amount of Home Pension monthly payments compared to last year
Korea Housing Finance Corporation (HF, CEO Choi Joon Woo) revealed on January 13, 2022, that it will adjust Home Pension monthly payments for new applicants from February 1, 2022.
According to the Korea Housing Finance Corporation Act, HF annually recalculates the amount of Home Pension monthly payments after considering the ▲ house price growth rate, ▲ interest rate trends, ▲ life expectancy changes according to the Life Table, and other key variables and presents it to the Housing Finance Steering Committee for deliberation before determining the annual adjustment.
주택가격 상승률 : House price growth rate
이자율 추이 : Interest rate trends
가입자의 사망확률(기대여명) : Borrower’s probability of death (life expectancy)
With this year’s key variable recalculation, new Home Pension applicants from February 1, 2022, will see a slight increase (0.7% year-on-year on average) in monthly payments. This modest increase is due to the fact that the high YoY house price growth rate is offset to some extent by the increase in interest rates and life expectancy.
【 Illustrative Examples: Home Pension Monthly Payments (Unit: KRW thousands) 】
At the same time, the minimum price threshold for higher-priced housing in the Income Tax Act has been adjusted from KRW 900 million to KRW 1.2 billion in market value. This raises the maximum home price reflected in calculating monthly Home Pension payments to KRW 1.2 billion as well.
HF CEO Choi, “To ensure a financially stable retirement for senior citizens, we have worked to make Home Pension available to a broader base of potential users, diversify Home Pension receiving methods, and provide stronger payment protection. Thanks to these strenuous efforts, the cumulative total of Home Pension subscriptions reached 92,000 at the end of last year and is expected to surpass 100,000 this year.” He also added, “To help the elderly with lower-priced homes secure greater income, HF will expand the scope and benefits of the preferential Home Pension scheme and thereby promote Home Pension in 2022.”
An HF official said, “As these monthly payment adjustments vary depending on the applicant’s age and home value, it is recommended to decide when to apply for Home Pension after consultation.” He also added, “Subscription fees and expenses and the surviving spouse’s right to inherit Home Pension also differ according to how the collateral is initially provided. For this reason, we recommend that those considering Home Pension subscription contact the HF Call Center at 1688-8114 for prior consultation and select the Home Pension scheme that suits their particular needs.”
These annual monthly payment adjustments do not affect existing subscribers, who are entitled to the same amount of monthly payments regardless of future changes in their home value. For them, the maximum house price limit will also remain at KRW 900 million or less.
