HF Releases 50-Year Policy Mortgage Loan

Korea Housing Finance Corp. (HF) said on July 15 that the corporation would release a “nest loan” and “conforming borrowing” with a 50-year maturity from Aug. 1.

People aged 34 or under, or couples who get married within the past seven years, are eligible for the nest loan and conforming borrowing, to be repaid on a principle amortization / principle and interest amortization format.

The release of the nest loan and conforming borrowing comes in accordance with the direction of the new government’s household debt management and gradual regulatory normalization initiative, announced by the Financial Services Commission (FSC) on June 16.

The interest rate of the new loan will be set at that of a loan with a 40-year maturity to alleviate the financial burden for youth. The conventional interest rate of a 40-year loan is 0.02 percentage points lower than the current interest rate.

As of July, the nest loan will see its interest rate change from 4.8 percent for a 30-year loan, and 4.85 percent for a 40-year loan, to 4.8 percent for a 30-year loan, 4.83 percent for a 40-year-loan and 4.85 percent for a 50-year-loan.

According to HF, if customers receive a 300 million loan based on an annual interest rate of 4.85 percent, with a principle and interest amortization format, they will have to pay out 1.33 million won in monthly payments.

The figure is a big annual reduction compared to a monthly payment of 1.41 million won on a 40-year loan based on an annual interest rate of 4.83 percent and principle and interest amortization format.

An HF official said users of a 40-year loan product, released in July 2021, accounted for 18 percent of total nest loan borrowers as of the end of June with the load spreading not only to banks and but also to non-banking institutions.

HF will spearhead efforts to support low-income earners and loan borrowers in compliance of the government’s policy stance to stabilize public livelihoods down the road, the official added.

President Choi Joon-woo of Korea Housing Finance Corporation and President Park Sang-jin of Naver Financial Co. pose after they signed a “Comprehensive Work Agreement for the Housing Finance Credit Guarantee Non-contact Service” at HF headquarters in the Busan International Financing Center on June 24. (Photo: HF)

HF Strikes Deal on Customized Guarantee Product Recommendation Service with Naver Financial

Korea Housing Finance Corporation announced on June 24 that it signed a “Comprehensive Work Agreement for the Housing Finance Credit Guarantee Non-contact Service” with Naver Financial Co. that enables the provisions of customized automatic product recommendation services related with jeonse, or reverse mortgage guarantees, for its potential customers.

Going forward, the Naver Financial Service Channel will offer automatic tailored jeonse guarantee product recommendation and related product information for HF potential customers, based on the customer information such as age and region.

In addition, in order to help customers easily navigate available housing guarantee products, real-estate related contents will be added on the service.

For example, in case a young adult, aged 33, looking for jeonse in Seoul, tries to look into jeonse loans, the channel recommends not just the general jeonse guarantee products, but also the special jeonse guarantee for young adults with non-homeownership and the Jeonse Guarantee for Young Adults in Seoul.

HF and Naver Financial plan to launch the non-contact service on the web page or mobile channel of Naver Financial in the fourth quarter of this year, after completing contents & IT development and service test.

HF CEO Choi Joon-woo said, “We expect that the agreement with the Naver Financial can bring the digital noncontact service onto the next level. We will push ahead with more efforts to provide better customer-oriented digital service.”