[Edaily Reporter Kim Se-yeon ] The amount of money that guarantee agencies have paid on behalf of low-income earners and young people who were unable to repay their monthly rent loans has tripled in three years. In contrast, the scale and number of policy guarantees for these groups are on the decline. As the ability of low-income earners to repay their debts continues to decline, critics point out that the government’s policy-based financial support intended to help them is failing to fulfill its intended role.

According to data submitted by the Korea Housing Finance Corporation (KHFC) to Rep. Park Seong-hun of the People Power Party, a member of the National Assembly’s Political Affairs Committee, the subrogation rate for general monthly rent guarantees soared from 4.2% at the end of 2023 to 12.1% by the end of June this year. This represents a nearly threefold increase in just two and a half years. Specifically, after rising annually—reaching 6.6% by the end of 2024 and 9.9% by the end of 2025—the rate surpassed 10% this year.
Subrogation refers to the Korea Housing Finance Corporation (KHFC) repaying a financial institution on behalf of a borrower who has received a guarantee but is unable to repay the debt. A sharp rise in the subrogation rate indicates that the ability of monthly renters to repay their debts is deteriorating at a correspondingly rapid pace.
The amount of subrogation payments is also on the rise. For standard monthly rent, the figure increased from 288 million won at the end of 2023 to 377 million won at the end of 2024 and 433 million won at the end of 2025. As of June this year, 225 million won has already been paid out in subrogation. At the current pace, the total amount is projected to exceed last year’s figure by the end of this year.
The bigger problem is that while the repayment capacity of low-income households is deteriorating, access to policy-backed guarantees is actually becoming more restricted. New guarantees for standard monthly rent plummeted by 33.8% in just one year, from 361 cases in 2024 to 239 cases in 2025. New guarantees this year also totaled only 122 cases through June.
The situation regarding policy guarantees for young people is even more dire. Special monthly rent guarantees for young people without homes totaled just one case each in 2024 and 2025. As of June this year, there have been only two cases. This means that over the past two and a half years, a mere four special monthly rent guarantees for young people have been provided nationwide.
The average guarantee amount for general monthly rent also decreased from 7.3 million won at the end of 2023 to 6.9 million won as of the end of June this year. The average guarantee amount for special youth monthly rent guarantees fell from 6.5 million won in 2023 to 5.3 million won in 2025.
Rep. Park Seong-hoon pointed out, “While the repayment capacity of monthly renters is crumbling, policy guarantees are actually taking a step backward,” adding, “The fact that the subrogation rate has jumped nearly threefold while the supply of guarantees has plummeted is clear evidence that the government’s housing policy for low-income residents is not working properly on the ground.” He continued, “The fact that only four special monthly rent guarantees for young people without homes have been provided over the past two and a half years means this is essentially a ‘ghost product’ that exists in name only,” adding, “Before pushing young people to buy townhouses, the government must first address the reality of young people who are struggling to even afford their monthly rent.”