As Seoul jeonse prices rose, use of the low-interest policy loan for housing deposit, the Bogeumjari jeonse deposit loan, for low-income people without homes fell sharply. In particular, the loan dedicated to newlyweds fell by nearly 60% in two years.
On the 30th, according to data submitted by Song Eon-seok of the People Power Party, a member of the National Policy Committee, from the Korea Housing & Urban Guarantee Corporation (HUG), new Bogeumjari jeonse deposit loans totaled 124,959 last year, down 42.1% from the previous year (215,833). During the same period, the loan amount also fell 45.5% from 2.47902 trillion won to 1.35041 trillion won.
The drop was larger in Seoul. New loans in Seoul fell 44.5%, from 70,328 in 2024 to 39,057 last year.
Bogeumjari jeonse deposit loans for newlyweds declined even more. The number of new loans fell 49.7%, from 28,262 in 2024 to 14,196 last year. Compared with the 2023 loan count (33,149), it decreased 57.2% in two years.
The decline in Bogeumjari jeonse deposit loans appears to have been affected by a reduction in eligible dwellings for the loan due to rising jeonse prices.
Bogeumjari jeonse deposit loans require not only income and asset criteria but also that the deposit for the dwelling to be leased meets the standard. For general Bogeumjari loans, eligible dwellings are those with deposits of 300 million won or less in the Seoul metropolitan area and 200 million won or less outside the metropolitan area. The newlyweds-only program applies to 400 million won in the metropolitan area and 300 million won outside it, and the newborn special program applies to dwellings of 500 million won or less in the metropolitan area and 400 million won or less outside it.
According to KB Real Estate, the median jeonse price for Seoul dwellings rose from 370 million won in Jan. 2024 to 406.67 million won in Dec. last year, exceeding the 400 million won eligibility threshold for metropolitan-area dwellings under the newlyweds' Bogeumjari loan. In Aug. this year, it climbed to 425 million won. Simply based on the median price, more than half of Seoul dwellings have fallen outside the newlyweds' Bogeumjari loan eligibility.
In this situation, with the base rate also raised, there are concerns that tenants who cannot use policy loans and must turn to commercial bank jeonse loans with relatively higher interest rates could face a heavier interest burden. The Bank of Korea's monetary policy committee raised the base rate by 0.25 percentage point to 3.00% per year on the 27th. It was the second straight monthly increase.
In response, some say the eligible-dwelling deposit thresholds and loan limits for Bogeumjari loans should be adjusted to match the rise in jeonse prices.
Song said, "As the housing cost burden on low-income people without homes, pushed out of low-interest policy loans, is growing, the eligible-dwelling criteria and loan limits should be raised to reflect reality."
However, the Ministry of Land, Infrastructure and Transport says that last year's decline appears large because of a base effect from unusually high Bogeumjari lending in 2023–2024.
New Bogeumjari loans surged from 141,698 in 2021 and 159,620 in 2022 to 255,441 in 2023. They remained high at 215,833 in 2024, then fell to 124,959 last year.