Park Han-sol reports on Korea's financial regulators, along with fintech and insurance. She previously wrote about the art world, from biennales and exhibitions to fairs and auctions, with a focus on Seoul and the figures shaping the scene. Before joining The Korea Times, she spent a year at ABC News' Seoul bureau, contributing to coverage of major Asia-Pacific events.
Gov't to expand housing finance support for young, 1st-time buyers while keeping debt curbs
A view of apartment complexes in Seoul seen from the Lotte World Tower, Wednesday / Yonhap
By Park Han-sol
The Financial Services Commission (FSC) will expand housing finance support for young people, newlyweds and first-time homebuyers while maintaining its overall household-debt controls, as part of the government's efforts to stabilize the housing market, the regulator said Thursday.
FSC Chairman Lee Eog-weon announced a package of measures aimed at ensuring tighter lending rules do not unnecessarily restrict financing for genuine homebuyers or new housing construction.
The commission will maintain existing loan-to-value and debt-service ratio rules, while allowing banks to continue providing loans linked to new housing supply and home purchases by young and first-time buyers without being excessively constrained by household lending quotas.
A key part of the package is a three-pronged housing finance program for younger borrowers. The FSC plans to introduce a mortgage loan providing longer-term financing for young people preparing to purchase homes, alongside a new guarantee product for "jeonse" deposit refunds.
The regulator will also expand the use of borrowers' expected future income when calculating their debt-service ratios, potentially increasing the amount younger workers can borrow as their earnings are expected to rise over time.
For newlyweds, the government plans to ease what it calls the “marriage penalty” in policy lending. Couples will be allowed to retain certain loan eligibility based on their individual circumstances rather than automatically losing access to programs when their incomes are combined after marriage.
The measures are intended to strike a balance between containing household debt and ensuring that credit remains available to borrowers deemed to have genuine housing needs, according to the FSC.
It also plans to strengthen the monitoring of housing-related lending to distinguish between loans supporting actual home purchases and those contributing to speculative demand.