Tightening lending rules to hit young, low-income borrowers hardest
Bank of Korea Governor Lee Ju-yeol speaks during an audit of the central bank at the National Assembly, Oct. 15. YonhapPressure furthered from Bank of Korea's probable November rate hike By Lee Kyung-min Borrowers in need of loans for “jeonse,” or Korean-style deposit lease payments, remain highly concerned, despite a recent government announcement that mortgage loan seekers will not be subject to tightening lending rules implemented to curb snowballing household debt over the course of the COVID-19 pandemic. Unique to Korea, jeonse is a home-renting system whereby tenants pay a refundable lump sum deposit instead of a monthly rent. Young, low-income borrowers who took out cheap loans enabled by the pandemic-induced expansionary monetary policies will be squeezed by rising interest payments, as inferred by Bank of Korea Governor Lee Ju-yeol who expressed little concern about a key rate hike wreaking havoc on the economy. “Our economic forecast showed that borrowers would experience limited difficulty even when we raise the key rate in November,” Lee said durin
