HF Launches ‘Fixed-Rate MOU-Based Jeonse Loan Guarantee’

- The new HF service comes with a 0.1%p-lower guarantee rate and a 100% guarantee coverage ratio

Korea Housing Finance Corporation (HF, CEO Choi Joon Woo) announced on March 28, 2023, that it will unveil its ‘Fixed-Rate MOU-Based Jeonse Loan Guarantee’ on the following day. The new guarantee offers a 100%* guarantee coverage ratio and a 0.1%p-lower guarantee rate than its regular jeonse loan guarantees. The launch of this guarantee product is in line with the‘Economic Policy Directions for 2023’ announced by the government this January. 

 * The coverage ratio of HF’s regular jeonse loan guarantees is 90% of the loan amount.

This guarantee product is available for individuals without home ownership* who apply for a fixed-rate jeonse loan at any banks that offer the ‘Fixed-Rate MOU-Based Jeonse Loan Guarantee’ product. ▲Its maximum guarantee amount is KRW 400 million, and  ▲ it is offered at the four commercial banks of Kyongnam Bank, Industrial Bank of Korea, Kbank, and KEB Hana Bank.

 * For a married couple without home ownership, both the applicant and his or her spouse are considered to have no home ownership.

HF has fixed the additional rate at 0.5%p to 1.0%p by signing an individual MOU with the banks and has adopted the 100% coverage ratio, eliminating differential additional rates based on credit ratings. This enables the supply of jeonse loans at a low, fixed rate. This product does not charge early repayment fees even if the borrower pays off the loan early with their surplus money.

<Fixed-Rate MOU-Based Jeonse Loan Guarantee: Illustrative Case>

HF CEO Choi Joon Woo said, “We expect that this product will not only protect borrowers from potential rate hikes, but also contribute to increasing the share of fixed-rate loans in the jeonse loan market. HF will continue our efforts to ease the cost of home loan borrowers.”