100% → 90% lower lease on a deposit basis loan guarantee ratio in 1Q

The guarantee ratio of jeonse loans, which was up to 100%, is expected to be unified to 90% from this year.

The Financial Services Commission said in its major business plan this year that it plans to unify the lease loan guarantee ratio, which was 100% by the Korea Housing & Urban Guarantee Corporation and 90% by the Korea Housing Finance Corporation.

The Financial Services Commission explained that it aims to implement it in the first quarter after consultation with the Ministry of Strategy and Finance and the Ministry of Land, Infrastructure and Transport, and that it is also considering further lowering the guarantee ratio for lease loans in the Seoul metropolitan area.

Kwon Dae-young, secretary-general of the Financial Services Commission, said, "The 100% guarantee of jeonse loans is not normal, and reducing the guarantee ratio will raise the interest rate, but I don't think the interest rate burden will be too much because it is a rate cut."

The Financial Services Commission also said it plans to implement the three-stage stress DSR measure, a high-intensity lending regulation, from July as scheduled.

This will add a stress rate of 1.5% on mortgages, credit loans and other loans from banks and non-banking lenders, which will significantly increase the interest burden.