A policy mortgage will be newly established to allow young people who pay monthly rents of 800,000 to 1 million won per month to purchase an officetel in the 200th million won range with a similar principal-and-interest repayment burden. For the Housing Loan for Newlyweds, the income eligibility threshold will be lowered from the current 850 thousand won (combined) to 70 million won or less based on one spouse's income, aiming to eliminate the "marriage penalty."
The Financial Services Commission announced on the 13th a "Comprehensive Financial Measures for Stabilizing the Real Estate Market" containing these contents. The financial authorities plan to sequentially launch a "Youth Housing Support 3-Set Package," tailored to young people's housing forms including owner-occupied, half-rental, monthly rental, and full rental, starting next January.
The core of this is the "Youth Future Housing Loan," which will be temporarily supplied at an annual rate of 3 trillion won for two years. Eligible applicants are first-time homebuyers aged 39 or under, initially applied to non-apartment units priced at 400 million won or less with a private area of 85 square meters or less. The Loan-to-Value (LTV) ratio will be allowed up to a maximum of 80%. The income eligibility requirement is an annual income of 70 million won or less. By applying preferential interest rates lower than those for the general Housing Loan, borrowers can utilize loans at low interest rates in the 3rd% range annually.
For example, when purchasing a 250 million won officetel with an LTV of 80%, borrowing 200 million won over a 30-year term at an annual interest rate of 3.0% results in a monthly principal-and-interest repayment of approximately 850,000 won. This allows young people to own a home at a level comparable to the average monthly rent for non-apartments, which is about 800,000 won.
Even when utilizing the Youth Future Housing Loan, the preferential LTV treatment for first-time homebuyers will be maintained. Under the current general Housing Loan, if the first-time buyer benefit is used, that preferential treatment expires thereafter; however, the new product preserves this benefit. The intention is to provide a "stepping stone" so that young people who purchase small non-apartment units can later sell their homes and use the first-time LTV preference again when purchasing larger apartments or other properties.
For youth in half-rental or monthly rental arrangements, a product that guarantees both full rental loans and monthly rental loans will be launched next January. Monthly rental loans will be converted to a negative account system, where funds are drawn only when needed, reducing unnecessary interest burdens. The eligibility age for the existing Youth-Specific Full Rental Loan Guarantee, currently limited to those under 34, will be expanded to include those aged 39 or under. Additionally, the loan limit for newlywed and families with children will be increased from 200 million won to 300 million won.
If one spouse's annual income is 70 million won or less, they qualify for the "Housing Loan"
The "marriage penalty," where using policy loans becomes more difficult due to marriage, will also be addressed. Currently, the income eligibility for the Housing Loan is 70 million won or less annually for unmarried individuals, while for newlywed couples it is a combined annual income of 850 thousand won or less. Starting in October, in addition to the existing requirement of a combined annual income of 850 thousand won or less for couples, the Housing Loan will also be available if one spouse's annual income is 70 million won or less. This means that even if the combined income exceeds the threshold due to dual incomes, a loan becomes possible as long as one individual's income meets the standard.
The scope of recognition for first-time LTV will also be expanded. Currently, individuals who have previously owned property through sales, inheritance, or gifts are ineligible for the first-time LTV preference; however, starting from the 31st of this month, exceptions will be recognized following review by a financial company's credit assessment committee in cases where there is an unavoidable reason, such as inheriting a share of a home during minority.
The system for calculating DSR loan limits based on young people's future income will also be adjusted to ensure actual utilization. Currently, while unmarried young workers can reflect future income when obtaining housing loans for the purpose of purchasing homes, this was left to the discretion of financial companies and thus had low utilization rates. Going forward, banks will be required to inform borrowers in writing how much their loan limits would increase if they apply the criteria for recognizing future income.
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