Household Loan Limits Doubled... Jeonse Loans Tightened Further

[Anchor]

On the demand side, financial institutions, including commercial banks, have been given much more breathing room as the limit on additional household loans they can issue this year has been doubled. Instead, jeonse (lump-sum housing deposit) loans will be completely blocked for speculative, non-residing single homeowners and tightened overall.

Reporter Park Jae-yeon has the details.

[Reporter]

The government has decided to relax its target for household loan growth from 1.5% compared to last year to 3%.

This creates about 4 trillion won in additional lending capacity for the top five commercial banks, and roughly 30 trillion won across the entire financial sector.

Apartment intermediate payment and balance loans, which were difficult to process within previous limits, are expected to become more accessible.

This accommodates the demands of homeowners who had already received pre-sales, anticipating they could secure loans before regulations tightened.

[Lee Eok-won / Chairman of the Financial Services Commission: We will rationally adjust the total volume targets so that linked loans resulting from new housing supplies, such as relocation and balance loans, can ensure smooth pre-sales and move-ins....]

However, loans that could flow toward existing apartments will be tightened further.

A prime example is the decision to block jeonse loans for non-residing single homeowners, whom the government has classified as speculative.

This means jeonse loans will be blocked for homeowners who own a house in a regulated metropolitan area but have never actually lived in it.

The government stated that it does not have an exact count of the non-residing single homeowners or the scale of loans that will newly fall under this regulatory target.

It also explained that banks may exercise their own judgment to issue loans in unavoidable cases, but how this will actually be applied in the field remains to be seen.

In addition, the guarantee ratio for jeonse loans in the metropolitan area and regulated zones, currently at 80%, has been reduced to 70%.

A lower guarantee ratio could make jeonse loan screenings relatively stricter or reduce loan limits.

With tax system revisions increasing incentives for actual residency, there are widespread concerns that jeonse supplies will decrease, and some predict that overlapping jeonse loan regulations could further destabilize the lease market.

(Photo: Cho Choon-dong | Video Editing: So Ji-hye | Design: Lee Jun-ho)
※ Please note: This article was translated by AI and may contain errors.