Late Payment Fees for Bogeumjari Loans to be Lowered

- Effective as of January 2012 for new loans -

The late payment fees for the BogeumjariLoan will be lowered substantially for new loans starting from January 2012.

Korea Housing Finance Corporation (HF, CEO Seo Jong-dae) announced in December 21 that it would dramatically lower the late payment fees for Bogeumjari Loans – HF's long-term, fixed-rate mortgage loans – taken out from January 2012 onwards. Moreover, fees will be charged in the form of additional interest rates rather than the flat penalty rate which currently applies to all loans.

The current system requires every late-paying customer to pay the same interest rate for a given period of lateness regardless of their product type or loan term, a policy seen by many late-paying customers who had taken out relatively low-interest loans as unfair.

Under the new system, by contrast, customers not more than three months behind on their payments will have 6 extra percentage points added to their original rates; for those who are more than three months behind, the penalty will be 8 extra percentage points. In either case, the combined interest rate cannot exceed 15%.