Bogeumjari Loan interest rate comes down further in May

- The lowest “u-Bogeumjari Loan” rate falls from 3.8% to 3.6%

- Rate falls 20bp across-the-board, alleviating cost of home purchases to low-income families

The Korea Housing Finance Corporation (KHFC, CEO Seo Jong-dae) announced on April 26 that it would make a 0.2 percentage-point cut to the interest rates on Bogeumjari Loans, its long-term, fixed-rate mortgages. The rate cut will apply to new loans taken out on May 2 and afterwards. This is the second cut this year since lowering the Bogeumjari Loan interest rate 0.2 percentage points in February.

“Prime Rate II,” applied when the combined annual income of a couple ranges between KRW 25 million and KRW 45 million, may fall to 4.2 percent a year (10-year maturity) as a result of the latest cut. “Prime Rate I,” applied to low-income households with the annual income of KRW 25 million or less, may drop to the lowest rate of 3.6 percent a year (10-year maturity).

The standard rate on a “u-Bogeumjari Loan,” which has a fixed-rate for its entire duration (10~30 years), will be lowered from the current 4.8 percent (10-year maturity) ~ 5.05 percent (30-year maturity) a year to 4.6 percent (10-year maturity) ~ 4.85 percent (30-year maturity) a year.

The latest rate cut by KHFC is intended to provide low-income households experiencing difficulty in finding houses to rent on a jeonse basis with long-term housing loans at the lowest rate of 3.6 percent and help them achieve home ownership.