Simulation results of a 30-year maturity assumption with an annual income of 100 million won
Government considers re-allowing mortgage loans for ‘homes exceeding 1.5 billion won’ following Chuseok
When the 1.5 billion apartment LTV is eased to 70%, the loan amount will increase by 166 million won
A central bank official said, “It will not be enough to affect housing price hikes.”
If mortgage loans for houses exceeding 1.5 billion won, which have been banned since December 2019, are resumed and the LTV ratio is applied to 70% regardless of price, the maximum loan amount that a borrower with an annual income of 100 million won can receive is 600 million won. Estimated to be around $46 million. This is because the loan amount is limited as the total debt-to-income ratio (DSR) regulation, which regulates the ratio of principal and interest to be repaid to income, is applied.
For apartments under 1.5 billion won, the loan amount is expected to increase by up to 166 million won as the LTV is raised.
As a result of simulations conducted by the Kyunghyang Shinmun by a commercial bank on the 5th, if the government eases the loan regulation under review, a borrower with an annual income of 100 million won will purchase an apartment with a market price of 1.5 billion won, 30 with a mixed type (5-year fixed type) interest rate of 4.65% per annum. It was found that the amount of loan available for purchase with a one-year, equal amortization method of mortgage loan increased by 166 million won from 480 million won to 646 million won.
Currently, in the case of houses under 1.5 billion won, 40% of the LTV is applied for the less than 900 million won, and 20% for the excess.
However, due to the DSR regulation, even if the market price of a house exceeds 1.5 billion won, it cannot receive more than 646 million won. In the current DSR, if the total loan amount exceeds 100 million won, the principal and interest to be repaid every year should not exceed 40% of the annual income (50% for non-bank notes).
If the maturity of the mortgage loan is increased to 40 years, the loanable amount for apartments exceeding 1.5 billion won will increase to 690 million won. For an apartment with a market price of 1.5 billion won, the loan amount will be 210 million won more than the current (480 million won).
In the case of an annual salary of 50 million won, the 30-year mortgage for an apartment exceeding 1.5 billion won was estimated to be 323 million won. It is expected that an annual salary of 70 million won can be loaned up to a maximum of 452 million won.
In the case of borrowing with a maturity of 40 years, it was estimated that an annual salary of 50 million won would receive up to 345 million won, and an annual salary of 70 million won would receive a loan of 483 million won.
However, it was analyzed that there would be no or insignificant loan increase for those who own an apartment of 1.5 billion won or less in the annual salary range of 100 million won or less. Even if the LTV is eased to 70%, the loan amount will not increase due to the DSR regulation because the income is small.
Relevant ministries such as the Ministry of Strategy and Finance, the Financial Services Commission, and the Ministry of Land, Infrastructure and Transport are expected to hold a meeting of real estate-related ministers right following the Chuseok holiday to discuss ways to lift the ban on mortgage loans for homes exceeding 1.5 billion won and apply the LTV rate to 70%.
The government announced the Real Estate Measures on December 16, 2019 and banned mortgage loans for houses exceeding 1.5 billion won in speculation areas and overheated speculation districts. In addition, for houses under 1.5 billion won, 40% of LTV was applied differentially to the amount of less than 900 million won and 20% to the amount in excess.
Park Chang-gyun, a senior research fellow at the Capital Market Research Institute, said, “DSR is a policy to prevent mass production of borrowers who cannot afford to buy a house with debt, but it has an incidental effect of preventing housing price increases. The amount of secured loans targeted is not increasing,” he said.
An official from a commercial bank said, “Loans are not likely to increase enough to affect housing price increases, and the government seems to be considering the implementation time.” You can get more,” he said.
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