Seniors in Their 70s Can Get 40-Year Mortgage Loans

According to data submitted by Democratic Party of Korea lawmaker Kang Hoon-sik, Korea Housing Finance Corporation’s 40-year maturity home mortgage loan product for borrowers in their 70s or older was implemented in December last year.

Bogeumjari Jugeumgong Green Loan Product

The Bogeumjari Jugeumgong Green Loan product was launched in September last year, providing a maturity of up to 40 years and a favorable interest rate of 0.1% regardless of age if you receive green building certification level 2 or higher.

Revised Home Loan Standards

In January this year, the foundry revised its home loan standards to allow for a 50-year maturity loan only for those under 34 (newlyweds under 39).

However, looking at the Bogeumjari loan processing standards from the 10th, in the case of a mortgage with a maturity of 40 years, a loan can be obtained if the debtor is 39 years old (new spouse under 49 years old) or if the mortgage is a house is a grade 2 or higher green building.

Loan Status

In fact, looking at the status of loans with a maturity of 40 years as of this month, there are 19 cases (KRW 4.8 billion) for people in their 60s or older and 1 case (KRW 100 million) for people in their 70s or older.

In the case of 30-year maturities, there were 16 cases (3.6 billion earned) for those in their 60s or older and 5 cases (1.1 billion earned) for those in their 70s or older.

Review of Bogeumjari Loan Processing Standards

Foundry announced that it is currently reviewing its Bogeumjari loan processing standards.

Strengthening Lending Standards

Last year, when very long-term mortgage products were identified as the cause of the increase in home loans, financial authorities ordered commercial banks to strengthen lending standards.

Accordingly, the banking sector stopped handling mortgage loans with a maturity of 50 years or established new age restrictions, such as 34 years or younger, for mortgage loans with a maturity of more than 40 years.

Call for Appropriate Support

Representative Kang pointed out that although lending standards had been strengthened earlier, these regulations were not reflected in the Green Nest Loan.

Representative Kang Hoon-sik emphasized, “To ensure that appropriate support is provided where needed, the Korea Housing Finance Corporation, which is the implementing agency, as well as the Financial Services Commission, which is the regulatory and supervisory agency must design products in detail to suit the original purpose of policy funding.”