My home is completely prepared… Introduced’ultra-long mortgage’ to pay off 40 years within the year

[한국금융신문 한아란 기자] An ultra-long-term policy mortgage product with a maturity of 40 years will be released within this year. This is a measure to reduce the burden of repaying the principal and interest paid monthly to young people who have difficulty in arranging a home.

On the 14th, the Financial Services Commission announced a priority task for the financial consumer sector that contained such details.

The Financial Services Commission decided to lower housing finance costs by introducing an ultra-long-term mortgage for young people and expanding youth jeon and monthly rent loans.

First of all, we will reduce the burden of repaying the principal and interest paid each month by introducing a main charge with a maturity of up to 40 years for young adults and newlyweds. For example, if a 30-year mortgage is paid at an annual interest rate of 2.5% and a loan of 300 million won, the monthly repayment amount for a 30-year mortgage is 1.19 million won, but a 40-year mortgage decreases by 16.1% to 990,000 won.

The Financial Services Commission decided to first introduce an ultra-long-term mortgage into a policy mortgage through computer development such as Korea Housing Finance Corporation (Jugeumgong).

The target of use is expected to be the same as other policy financial products such as Bogeumjari loans currently operated by Jugeumgong. The Bogeumjari Loan can be used only if it meets the requirements of a house price of 600 million won or less and a combined annual income of 70 million won or less for newlyweds (85 million won for newlyweds and a maximum of 100 million won for multiple children).

Lee Soo-young, head of the household finance department at the Financial Services Commission, said, “If you fall under the basic policy mortgage requirements, you can use a mortgage for up to 40 years.” “I will try to introduce it as soon as the preparation is completed within this year.”

To this end, Jugeumgong issued the first 30-year mortgage securities (MBS) since its establishment in October last year. Manager Lee said, “The prerequisite for supplying an ultra-long-term mortgage is that long-term financing must be possible at a fixed interest rate first.” “When the jujugong’s 30-year MBS is issued, the bid rate is 2 to 8 times each time. I don’t think there is a big problem with it.

Together with this, the Financial Services Commission decided to expand support for youth jeon and monthly rent loans in the first half of the year. The Youth Jeon-Month Loan is a product that provides a deposit of 70 million won or less and monthly rent of 500,000 won or less at an early 2% interest rate for youth under the age of 34. The interest rate is 2.18%, which is cheaper than the average interest rate of commercial loans (2.66%).

The Financial Services Commission is considering a plan to abolish the supply limit currently set at 4,110 trillion won, to provide sufficient loans to meet the needs of young people, and to increase the limit available per person. The plan is to reduce the burden on young people by lowering the guarantee fee from 0.05% to 0.02%.

The amortization of all households is also activated. Unlike the existing method of paying only the interest on the loan during the cheonsei period, amortization prepayment is a product that can partially pay off the principal, and can receive tax-free and income deduction benefits at maturity repayment. The Financial Services Commission plans to provide installment jeonse guarantees to private guarantors (SGIs) in addition to the Housing Finance Corporation and induce the expansion of non-face-to-face channels by bank.

For banks that have handled a lot of amortization out-of-house loans, consider ways to provide incentives for handling such as benefits of lower contributions to Jujibo. Since jeonse loans are also included in loans subject to the’home mortgage loan structure improvement’, a plan to recognize amortization jeonse loans as amortization loan performance is discussed.

The microfinance education expense loan system will also be reorganized to reduce the education gap. Private education expenses, such as academy expenses, will be included in the’education cost support loan’ to support education expenses for children of elementary, middle and high school children of low-income and low-credit families. For the vulnerable, such as the disabled, single parents, and multicultural families, the interest rate for education expenses is lowered from 4.5% per year to 3% per year, to two-thirds.

In addition, in order to promote the revitalization of the housing pension and improve the trust business system, a task force (TF) composed of financial authorities, industry, and experts will be operated to prepare detailed plans for restructuring the trust business.

Yoon Sang-hee, head of the Financial Consumer Policy Division, said, “The scope of entrusted property is expanded to not only active properties such as money and real estate, but also passive properties (liabilities) combined with assets, security rights, and so on. There is a way to allow companies to re-trust,” he said. “We are also planning to introduce various types of trusts, such as trusts for wills, trusts for dementia, and general property trusts.”

It supports rapid resurgence for vulnerable debtors. In the case of business closures or closures due to a novel coronavirus infection (Corona 19), regardless of their business history, they can apply for a special repayment deferral (maximum 2 years) before debt adjustment amortization.

Measures will also be taken to minimize side effects, such as shrinking credit loans for low-credit people due to the legal maximum interest rate cut in July. We reviewed the extent of the interest rate cut for the low-income financial product’Sunshine Loan 17′, and decided to provide temporary special products for repayment of borrowers who use borrowers, such as lenders, whose maturity extension of existing loans has become difficult due to the maximum interest rate cut. In addition, it supports individual financial sectors to design and supply policy products to the general public.

The company decided to induce low-credit loans and lower interest rates by providing incentives to outstanding lenders for low-credit loans. A plan to create the so-called’Loan Business Premier League’ by providing various incentives in terms of financing, business regulations, and sanctions to lenders that do not violate the law and focus on low-credit credit loans As a result, a plan to give preferential treatment to the loan-to-deposit ratio is reviewed.

In line with the cut in the highest interest rate, government-wide responses to eradicating illegal private finance will be strengthened, and victims’ relief and self-support support will also be promoted. Prosecutors, police officers, and special envoys conduct extensive Japanese crackdowns and deprive tax evasion gains through tax verification and investigation. Appointment of a debtor to block illegal collection, and support for lawyers for overpayment of the highest interest rate interest return lawsuit will also be expanded and strengthened.

Reporter Han Aran [email protected]