HF adjusts Bogeumjari Loan Rate for September

- 0.10%point increase for applications from September 1.

- Borrowers should look into if a preferential discount is available for them.

Korea Housing Finance Corporation(HF, CEO Choi Joon Woo) stated on August 27 that it will increase the annual interest rates by 0.10%point for September on Bogeumjari Loan product, its long-term, fixed-rate, amortizing mortgage loans.

Accordingly, from the loans of which application is completed on Sep 1, the interest rates of u-Bogeumjari Loan and t-Bogeumjari Loan will range from 2.80%(10-year maturity) to 3.10%(40-year maturity), whereas Akkim e-Bogeumjari Loan interest rate will be applied with 2.70%(10-year maturity) and 3.00%(40-year maturity), 0.1% point lower than the other two loan types. The annual rates will be fixed throughout the loan period. 

HF said, “Despite the upward pressure on the Bogeumjari Loan rates since June, the interest freeze has been maintained, so this time of adjustment became inevitable. The increase was kept to the minimum, lest low-to-moderate income households first-time homebuyers, who are main customers of the loans, should be subject to inordinate repayment burden.”

He added, “As the interest rate is on the upward trend these days, one might consider taking out Bogeumjari Loan, of which max. loan period spans to 40 years with a fixed interest rate. Those who complete the loan application by the end of August can be applied with the current rate before increase.”

It should be noted, however, whereas Bogeumjari Loan with 10 to 30 years of maturity do not come with particular restriction, the Bogeumjari Loan with 40-year maturity are confined to those who are 39 years or younger, or couples whose marriage registration date goes back to less than 7 years, or who are getting married within 3 months from application. 

In addition, the same rates of u-Bogeumjari Loan and t-Bogeumjari Loan by maturity are applied to the Deonaeun Bogeumjari Loan, which support borrowers to switch from floating-rate or bullet payment mortgages loans of non-banking lenders to the more affordable, fixed-rate, amortizing Bogeumjari Loan.

HF added, “The final rates by product and maturity after applying additional preferential or spread are sustained throughout the loan period. For more information on the terms or features of the loans, please visit HF website(www.hf.go.kr) or call HF Call-Center(1688-8114).”

“Furthermore, in general, longer maturity means less monthly repayment amount, but as longer maturity is applied with a higher base interest rate, the total amount of interest to be repaid during entire redemption period increases. Therefore, applicants should make a careful examination on their economic and financial situations before deciding a maturity period and a redemption method.”