Housing Loan Support Shrinks, Rates Rise, Exacerbating Homeownership Challenges for Newlywed Couples

Newlywed couples are encountering significant difficulties in securing funds for home purchases. Stricter government policies for subsidized loans and rising interest rates have made it harder to access programs like the 'Didimdol Loan,' while simultaneously increasing the burden of loan interest payments. In fact, the number of newlyweds who received the Didimdol Loan for their first home purchase has sharply declined compared to last year.

Following the loan regulations imposed on June 27 last year, the loan-to-value (LTV) ratio for first-time homebuyers in the metropolitan area and regulated zones was lowered from 80% to 70%. This standard was also applied to policy loans, reducing the Didimdol Loan limit from the previous 300 million won to 240 million won.

As newlywed couples excluded from policy loans or finding the limits insufficient are forced to rely on high-interest bank loans, mortgage rates in the banking sector have reached their highest level in 15 months due to the rise in the Certificate of Deposit (CD) interest rate-linked rate (COFIX). The COFIX for newly issued loans in May rose to 2.90%, a 0.01 percentage point increase from the previous month, marking the highest level since February of last year. The rise in COFIX quickly reflects changes in market interest rates, leading to an increase in variable-rate mortgage interest. Major banks began incorporating this increase into their lending rates starting from the 16th.

This situation intensifies the financial burden of homeownership for dual-income newlywed couples earning around 100 million won combined annually. Amidst financial authorities' push for household debt management, banks are also adopting a passive stance on loan supply. While customers unable to use policy loans seek out bank products, the current environment requires consideration of both interest rates and loan limits, making risk management for genuine homebuyers increasingly important.