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  • Seoul Expands Support of Making Interest Payments for Newlyweds’ Housing Loans

  • Welfare, Health & Security News SMG 1976

    Newlywed couples living in Seoul can take out a housing loan for rent or lease of up to KRW 200 million at low interest rates. Starting on January 1, 2020, the city will expand its program that pays back interest on behalf of newlywed couples to be more accessible and beneficial.

    The couple’s combined income criteria, which was the biggest barrier for those who wanted to apply for the subsidy, was loosened from less than KRW 80 million to less than KRW 97 million (150% of the average of workers in the city). The newlyweds whose combined monthly income is KRW 8 million (increased from the previous KRW 6.7 million) can now receive the support. The definition of the newlywed couple has also been expanded from those who got married within the last 5 years to the last 7 years.

    The highest interest rate that can receive support has been increased from 1.2% per year to 3.0% per year. The support period has been extended from 8 years to up to 10 years, depending on how many children a couple has. The additional prime rate is applicable according to the number of children: 0.2% for one child, 0.4% for two children, 0.6% for more than three children.

    Starting in 2020, the application for the interest support for the housing loan is acceptable not only at branches of KB Kookmin Bank but also at those of KEB Hana Bank and Shinhan Bank (starting in February). The expansions and appeasements of the service will be applied to the cases with a letter of reference issued on January 1, 2020.

    Seoul Expands Support of Making Interest Payments for Newlyweds’ Housing Loans
    Category Before After Notes
    Duration of Marriage Up to 5 years Up to 7 years A reflection of the central government’s policy to extend the definition of “newlywed couple”
    Combined Income Less than KRW 80 million a year Less than KRW 97 million a year Lessening the burden caused by housing expenses that are higher than those in other provinces; in consideration of the incomes of workers in the city
    Interest Support Up to 1.2% per year Up to 3.0% per year Application of differentiated interest rates for different classes of income; up to 0.6 % of prime rate for households with multiple children
    Loan Period Up to 8 years Up to 10 years 10-year support for households with 3 children

    The expanded support of interest payment for newlyweds’ housing loans is part of the “financial support” project, one of the key initiatives that belongs to the “Seoul’s Housing Support for Newlywed Couples” announced by the city at the end of October 2019. Seoul made a determined attempt to expand and reinforce the existing projects for the needs of newlyweds, who prefer to live in a house while considering their commuting time, child-rearing, and the residential environment.