Interest Rates and Jeonse Prices Rise, Yet Newlywed Beotimmok Loans Halved

While the benchmark interest rate has risen for two consecutive months and Seoul jeonse (lump-sum housing lease) prices are on an upward trend, the number of new users for the Beotimmok jeonse loan program—designed for homeless low- and middle-income families—has dropped by more than 40% in a year.

In particular, loans targeted at newlywed couples have plummeted by nearly 60% over two years. As the median jeonse price for housing in Seoul has surpassed the 400 million won ceiling required for the newlywed Beotimmok loan, calls are growing to update the eligibility criteria to reflect market realities.

According to data obtained from the Korea Housing & Urban Guarantee Corporation (HUG) today (the 30th) by Representative Song Eon-seok of the ruling People Power Party, who sits on the National Policy Committee, new Beotimmok jeonse loans totaled 124,959 cases last year, marking a 42.1% decrease from 215,833 cases the previous year.

The total loan amount also fell 45.5%, dropping from 24.7902 trillion won to 13.5041 trillion won.

New loans issued in Seoul dropped 44.5% over the same period, going from 70,328 cases to 39,057 cases.

New loans under the dedicated Beotimmok program for newlyweds decreased from 33,149 cases in 2023 to 28,262 cases in 2024, and further down to 14,196 cases in 2025.

This represents a 57.2% drop over a two-year span.

To qualify for a Beotimmok loan, applicants must meet specific income and asset requirements, alongside caps on the lease deposit (jeonse price) of the target property.

The eligibility limits for the jeonse deposit are set at 300 million won or less for the greater Seoul area and 200 million won or less for non-metropolitan areas under the general Beotimmok loan; 400 million won or less for the greater Seoul area and 300 million won or less for non-metropolitan areas under the newlywed-dedicated program; and 500 million won or less for the greater Seoul area and 400 million won or less for non-metropolitan areas under the newborn special program.

According to KB Real Estate, the median jeonse price for housing in Seoul rose from 370 million won in January 2024 to 406.67 million won in December of last year, crossing the greater Seoul threshold for the newlywed Beotimmok loan.

By August of this year, the median price climbed further to 425 million won.

This effectively means that more than half of all housing units in Seoul are excluded from the newlywed Beotimmok loan program based on jeonse price limits.

Meanwhile, upward pressure on commercial loan interest rates has also intensified.

Following a hike in the benchmark interest rate from 2.50% to 2.75% per annum last month, the Bank of Korea's Monetary Policy Board implemented an additional 0.25 percentage point increase to 3.00% on the 27th.

As benchmark rate hikes are passed on to commercial jeonse loan rates, the interest burden is expected to grow heavier for homeless tenants who rely on borrowed funds for their housing deposits.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.