With New Relief Conversion Loan Preferential Rates in the Range of 3%, HF Troubleshoots Worries About Interest Rates 

- 0.35%p cut in Bogeumjari Loan rates down to 4.15% to 4.55% 

 - New Relief Conversion Loan rates in the range of 3.7% to 4.0%

- HF and six commercial banks to give prior notice on New Relief Conversion Loans from the 17th on their webpages

Korea Housing Finance Corporation (HF, CEO Choi Joon-Woo) revealed on August 11, 2022, that starting on the 17th, it will lower the annual rates of Bogeumjari Loans by up to 0.35%p, down to the range of 4.15% to 4.55%. In addition, HF and six commercial banks* will unveil the details of New Relief Conversion Loans** on their official webpages starting from the 17th. Applications for KRW 25 trillion of New Relief Conversion Loans with preferential rates will be open on September 15, 2022. 

* KB Kookmin, IBK, Nonghyup, Shinhan, Woori, and KEB Hana

** Floating- or semi-fixed-rate home loans to be switched to a long-term, fixed-rate, amortized loan

 0.35%p cut in Bogeumjari Loan rates from the 17th

 - Annual rates down to 4.15% to 4.55% 

HF will lower the rates of Bogeumjari Loans, its long-term, fixed-rate, amortized home loan, by 0.35%p on August 17, 2022. 

The cut will drive the annual interest rates of u-Bogeumjari Loan, a mortgage loan offered through the HF webpage (www.hf.go.kr), and Akkim e-Bogeumjari Loan, an online-only Bogeumjari Loan that offers a 0.10%p rate reduction thanks to its online loan agreement system, down to the range of 4.25% (10-year term) to 4.55% (50-year term) and 4.15% (10-year term) to 4.45% (50-year term), respectively.

An HF official said, ‘‘As the Korean government bond yield remains relatively stable, we have decided to lower our rates to ease the loan payment burden on vulnerable groups.‘‘

Preferential rates of New Relief Conversion Loans found to be 0.45%p to 0.55%p lower than those of Bogeumjari Loans

To reduce the financial burden on vulnerable groups at this time of rising interest rates, HF is lowering the rates of New Relief Conversion Loans. The rate cut allows for a 0.45%p to 0.55%p rate discount compared to u-Bogeumjari Loans. Accordingly, the annual rates of New Relief Conversion Loans will go down to the range of 3.8% (10-year term) to 4.0% (30-year term) and to 3.7% (10-year term) to 3.9% (30-year term) for low-income youth*.

   * Those aged 39 and below with annual income up to KRW 60 million

Preferential New Relief Conversion Loans available for those with floating- or semi-fixed-rate home loans

 - Married couples with combined annual income of KRW 70 million or less and a single home valued at KRW 400 million or less

 - No early repayment fee for those switching from conventional home loans to New Relief Conversion Loans 

New Relief Conversion Loans are a long-term, fixed-rate home loan offered by HF to those on a floating- or semi-fixed-rate home loan taken out from the banking or non-banking sectors.  This year alone, preferential New Relief Conversion Loans worth KRW 25 trillion will be injected into the economy. The Loans, however, will not be available to those already on a fixed-rate home loan or state-guaranteed mortgage loan (including Bogeumjari Loans, Conforming Loans, and Didimdol Loans). 

New Relief Conversion Loans will be offered to married couples with a combined annual income of KRW 70 million or less and a single home valued at KRW 400 million or less. These eligible candidates will be able to borrow up to KRW 250 million within the range of their remaining loan amount. In addition, HF does not apply early repayment fees to help those on the conventional home loans switch to New Relief Conversion Loans without additional financing costs. 

 Early notice to be offered online from the 17th 

 -HF and six banks provide eligibility, application, and availability details on their webpages

Starting from the 17th, HF and six commercial banks (KB Kookmin, IBK, Nonghyup, Shinhan, Woori, and KEB Hana) will unveil details on the product, eligible home prices and other requirements, and the application method and schedule on their official webpages. For more information, those on a home loan taken out from the six commercial banks can go to the webpage of their loan lender, while those on a home loan taken out from other banks or non-banking institutions should visit the HF webpage. 

 Applications for preferential New Relief Conversion Loans to be open for those with low-price homes from September 15 

 - Those with homes valued at KRW 300 million or less: September 15-28

 - Those with homes valued at KRW 400 million or less: October 6 to 13 

Applications for these loans will be open from September 15-28, 2022, for those with homes valued at KRW 300 million or less and again from October 6 to 13, 2022, for those with homes valued at KRW 400 million or less. HF will select the final candidates not on a first-come, first-served basis, but on the basis of lower home prices.

Those with home loans from the six commercial banks (KB Kookmin, IBK, Nonghyup, Shinhan, Woori, and KEB Hana) can apply for New Relief Conversion Loans offline at their sales branches (or online), while those with home loans from other banks or non-banking lenders (including savings banks and insurers) can submit their applications on the HF webpage (or the Smart Home Financing App).

HF CEO Choi Joon-Woo said, ‘‘New Relief Conversion Loans are a government-guaranteed product launched jointly by the government, HF, and other financial institutions to help those suffering from repayment burden, especially due to rising interest rates. As the annual rates are fixed in the range of 3% until the maturity date, the loan is not affected by future interest hikes and also offers no repayment fees. We recommend home loan users consider switching to the New Relief Conversion Loans.‘‘