Features

Life Time Guarantee : Valid until the event of the death of both the homeowners and their spouses

Grounds for Guarantee Termination

Death of both the homeowners and their spouses
Loss of homeownership

Including the destruction/demolition of the collateral house by fire, a natural disaster, or as per a reconstruction or urban redevelopment projects.
When the homeownership and the Pension obligations are not passed to the spouse within six months from homeowner’s death.
Found to have not resided in the house for more than one year.

Collateral Provision Methods

The Mortgage Method refers to where the property owner registers a mortgage on the property to provide it as collateral. The Trust Method is a guarantee wherein the trust is registered for the transfer of ownership and the property is provided as collateral in accordance with the trust contract concluded between the property owner and HF.

Collateral Provision Methods
Category	Mortgage Method	Trust Method
Collateralization Method	Mortgage registration on the property (Subscribers retain homeownership)	Trust registration (Homeownership is transferred to HF)
Collateral Management	Pension subscriber is the owner of the mortgaged property and manage the property.	Pension subscriber manages of the collateralized property in accordance with the trust contract
Management Expenses	A pension subscriber bears the property management expenses such as taxes and public utilities. (Property tax and comprehensive real estate holding tax, etc are included.)	Same as left
Spouse Succession	In the event of the death of a pension subscriber, the spouse may inherit the property pension without a registration procedure when the spouse acquires 100% of property ownership with the consent of co-heirs including children.	In the event of the death of a pension subscriber, the spouse acquires the beneficial interest under the trust contract, and the property-backed pension may be succeeded without a consent of co-heirs or additional registration procedure.
Return of residual proceeds of collateralized property	Residual proceeds after the disposal of mortgaged property are inherited to the legal heirs in accordance with the Civil Act.	Residual proceeds after the disposal of collateralized property are returned to the rights holder designated in advance by the pension subscriber.
Actual Residency Requirements	Pension subscriber or spouses must reside in the mortgaged property. When a consent is obtained for the transfer of resident registration from HF, the actual residency requirement is exempted.	Same as left
Housing Lease	Only monthly lease without a deposit is permitted. (Lease with deposit is not allowed.) To lease the mortgaged property in entirety, HF approval must be obtained prior to resident registration.	Housing lease with a deposit is allowed. ※ The deposit money must be kept in a bank designated by HF. To lease the mortgaged property in entirety, HF approval must be obtained prior to resident registration.
Property Eligibility for Collateral	Housing, welfare housing for the elderly, or officetels for residential purposes. Mixed-use housing with 50% or more residential areas.	Housing, welfare housing for the elderly, or officetels for residential purposes. ※ Restricted housing Multi-use housing Housing for which the owner qualification are required in accordance with other statutes, such as “farmers” or “fishermen” under the Agricultural Land Act Housing owned for lease with five or more lease contracts with deposits.

Payment Types & Payment Options

Payment Types

Tenure Type
- A fixed amount is paid out each month until the death of both borrowers and spouses
Modified Tenure Type
- Withdrawals are allowed within 50% of the total loan limit. Balances will be paid in monthly payments until the termination of the guarantee.
  ※ Lump-sum withdrawals may be used for any purpose except purchasing a home (rental), speculation purpose, or gambling and other extravagant spending.
Term Type
- Withdrawals are allowed within 45% of the total loan limit. Balances will be paid in monthly payment over the course of guarantee period, chosen by the customer chooses. (5% of the total loan limit is paid out to the customer when the payment term ends, only for medical and home maintenance expenses.)

Monthly Payment Schemes

Straight Line Payment: Lifetime equal amount of the monthly payment
High-Low Payment: higher monthly payments than those under the straight line option for certain period (3, 5, 7, or 10 years by subscriber’s choice) before receiving approximately 70% of the initial amount afterward.
Periodic increase type: monthly payment less than the straight-line, but the payment increase by 4.5% for every three years

Housing(Tenure Type, Straight Line Payment), As of Oct 12th 2023

(unit : thousand won)

월지급금예시 중 종신지급방식(정액형 기준) 중 일반주택 정보표 : 연령, 주택가격, 1억원, 2억원, 3억원, 4억원, 5억원, 6억원, 7억원, 8억원, 9억원, 10억원, 11억원, 12억원 정보 제공
Age	House value
Age	100 M	200 M	300 M	400 M	500 M	600 M	700 M	800 M	900 M	1000 M	1100 M	1200 M
50	112	225	338	451	564	677	790	903	1,016	1,129	1,242	1,355
55	151	302	453	604	756	907	1,058	1,209	1,360	1,512	1,663	1,814
60	204	409	614	819	1,023	1,228	1,433	1,638	1,843	2,047	2,252	2,457
65	246	492	739	985	1,232	1,478	1,724	1,971	2,217	2,464	2,710	2,957
70	300	601	901	1,202	1,503	1,803	2,104	2,405	2,705	3,006	3,307	3,315
75	373	746	1,120	1,493	1,867	2,240	2,613	2,987	3,360	3,573	3,573	3,573
80	476	951	1,427	1,903	2,379	2,855	3,331	3,807	3,972	3,972	3,972	3,972

Loan Interest Rate (%p.a.)

Monthly Interest Rate: At the time of subscription, borrowers can opt either ‘a 3-month adjustable CD rate +1.1%‘ or ‘a 6-month adjustable COFIX rate +0.85%‘ of the loan balance.
The interests are not required to be paid by borrowers directly, as the monthly payments are accumulated and added to the total loan balance.

Guarantee Fees (Initial Guarantee Fees and Annual Guarantee Fees)

Initial Guarantee Fees: One-time initial guarantee fees of the 1.5% of the house price is charged when the first monthly loan payment is made.
Annual Guarantee Fees: 0.75% of the loan balance is charged annually and paid on a monthly basis.
Both of the guarantee fees are not required to be paid by borrowers directly, as the fees are accumulated and added to the total loan balance.

Collateral Provision: HF is an unsubordinated creditor and holds the primary claim on the collateral house.

A house owned by a third party (children or siblings of the applicant, etc.) is not eligible as collateral for the Home Pension.
The mortgage can be set by the borrower at 120% of the total estimated loan balance.

Loan Repayment: The loan can be repaid in a lump-sum with the proceeds from property sale after the death of the Home Pension user(s)

The total loan repayment amount is limited to the house disposal price.

Borrowers may opt to repay their loans in entirety or in part at any time without prepayment fees. (Note: Initial guarantee fees are not refundable.)

Loan repayment
Time of Repayment	Amount to be Repaid	Remarks
Property Value < Loan Balance	House price	Shortfall not claimed against the inheritor
Property Value > Loan Balance	Loan balance	Inheritor receives the residual value

Tax Benefits

Tax Benefits
Description	Remarks
Mortgage Settlement	Exemption of; registration tax, education tax, the obligatory purchase of National Housing Bonds and Special Tax for Farming and Fishing Villages
Home Pension Users	25% reduction of property tax (limited to 25% of tax based on the house of KRW500 M) Deduction of paid interests from taxable income (up to KRW2M)

Full menu