HF Cuts Special Bogeumjari Loan Rate by 0.5%p to Lower the Burden of Housing Costs on Those with Low Incomes and Real Home Demand

- After the 0.5%p cut to its initially planned rate, 4.25-4.55% for the regular type and 4.15-4.45% for the preferential type

Korea Housing Finance Corporation (HF, CEO Choi Joon Woo) said on January 26, 2023, that it will receive applications for the Special Bogeumjari Loan* at the annual interest rates of 4.25 to 4.55% for the regular type and 4.15 to 4.45% for the preferential type starting from January 30, 2023. HF has lowered the initial interest rates by 0.5%p after considering the market rate trends. 

 *  Combining the Relief Conversion Loan and the Conforming Loan, the Special Bogeumjari Loan is offered temporarily for one year to ease the burden of interest rate fluctuations on those with low incomes and real home demand during the time of rate hikes. Those with a home valued at KRW 900 million or less can borrow up to KRW 500 million regardless of their income amount. 

For the regular type available for anyone with a home valued at KRW 900 million or less regardless of the amount of income, the annual interest rates are set at 4.25 (10-year maturity) to 4.55% (50-year maturity). For the preferential type, which is offered to those with a home valued at KRW 600 million or less and an annual income of KRW 100 million or less, the annual interest rates are 4.15 to 4.45%, 0.1%p lower than those for the regular type. An additional 0.1%p discount in the interest rates is offered for online applications that use an electronic agreement method (Akkim e). 

In addition, the preferential type is available even at lower interest rates*, as HF additionally offers a 0.1%p discount for low-income young adults, 0.2%p discount for newlywed couples, and 0.4%p discount for the socially underprivileged. 

 * With the additional rate discounts applied, the preferential type can be offered at annual interest rates of 3.25 to 3.55%.

[Early Repayment Fee] Existing Borrowers and Special Bogeumjari Loan Borrowers Exempt from the Fee 

To ease the financial burden on those switching from their existing loans to the Special Bogeumjari Loan, they are exempt* from an early repayment fee. This exemption also applies to Special Bogeumjari Loan borrowers who pay off their loan early. 

 * The exemption is offered only for those with a mortgage loan. Those who want this loan switch need to visit the official HF webpage or its mobile application to get the Letter of Confirmation for the Approval of the Special Bogeumjari Loan issued and submit it to their existing lender. 

[Application] Available at the Official HF Webpage and the HF Mobile Application 

HF will accept applications starting from January 30, 2023, at 09:00, at its official webpage (hf.go.kr) and its mobile application, Smart Home Pension*. Applicants can take out the Special Bogeumjari Loan easily without additional document submission once they consent to the scraping service (for automated document submission) and the use of information for the purpose of administrative process. 

 * From January 31, 2023, HF will accept applications from 03:00 to 24:00 (even on weekends and public holidays).

HF offers a chatbot service called ‘HF Talk’* to provide personalized consultation 24 hours a day. For older adults aged 60 years and older and the hearing impaired with phone conversation difficulties, it provides ‘Remote Application Support Service’**.

 *  An AI-driven consultation service via the ‘Korea Housing Finance Corporation’ KakaoTalk channel 

 **If they book the service on the desired date and time at HF’s official webpage or the Smart Home Pension application, HF staff helps them submit an application on their desktop via remote support.

In addition, Standard Chartered Bank Korea accepts applications for the Loan for those who have difficulties in making an online application. Please note that in this case of offline application, the ‘Akkim e’rate discount of 0.1%p is not available. 

HF CEO Choi said, “Given the recent decrease in our MBS funding costs due to the downward treasury bond rates after we announced our plan to launch the Special Bogeumjari Loan, we’ve decided to lower its interest rates. We expect that more people with low incomes and real home demand will take out this loan during the time of rate hikes so that they can reduce their housing costs.”

From this March, HF will adjust the base interest rates of the Special Bogeumjari Loan if necessary after considering monthly market rate trends and funding conditions.