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Recently, as interest rates have risen rapidly, interest rates on jeonse loans are also rising. As a result, there is a situation in which it saves even a little bit of money by paying monthly rent rather than getting a loan and living on a cheonsei basis.
Correspondent Han Sang-woo.
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This is a table of interest rates for large banks' Jeonse funds.
The cheapest interest rates are in the high 3% range, and the most expensive ones soar to the high 4% range.
In practice, most loans are made at around 4.5%.
[Bank official: I know that it varies by region, but I know that it is cheaper to pay monthly rent.] This has led to
a situation in which it may be more advantageous to pay the rent to the landlord than to get a loan and find a jeonse house.
The interest rate applied when changing Jeonse to monthly rent is called the Jeonse to monthly rent conversion rate, and it is currently 4.1%.
For example, if you borrowed a loan of 300 million won, which is half of a house with a deposit of 600 million won, the interest would be 1125,000 won per month at 4.5% per year.
However, if you pay off this 300 million won and convert it all to monthly rent, you pay 1025,000 won in monthly rent by applying an annual interest of 4.1%.
This means that the burden of monthly rent will be reduced by 100,000 won compared to the Jeonse loan.
In particular, bank interest is expected to continue to rise for the time being, but there is also a point that the monthly rent remains the same for 1 or 2 years or more once a contract is signed.
As more and more landlords prefer monthly rent because it is better than bank interest, monthly rent is already becoming a trend in Seoul.
[Authorized Broker: Until now (Jeonse loan), monthly rent is relatively cheaper than interest rate, so there is more demand for monthly rent.
I think the ratio is about 7 to 3.]
As interest rates rise, the monthly rent is expected to continue to rise, especially in the metropolitan area, where there are many new apartments.
(Video editing: Lee Seung-yeol)