[Edaily Reporter Choi Jeong Hoon ] Mr. Kim, a newlywed who purchased his first home through the “Bogeumjari” mortgage program, sets aside his loan payment first on payday and then plans his monthly household budget with the remaining money. After deducting maintenance fees, utilities, and food expenses, there’s less money left for savings than he expected. While they are happy to have a home where they don’t have to worry about moving, the couple has become more cautious about spending, even with both incomes combined. Mr. Kim said, “When we were buying the house, we only considered how much we could borrow, but once we actually started paying it back, we realized how important it is to have money left over each month,” adding, “We’ve bought a home, but it’s not easy to save up a large sum of money again.”

The total amount of loans taken out by newlywed households using the “Bogeumjari Loan”—a program designed to help first-time homebuyers—is on the rise. While average income has barely increased, the amount borrowed has risen. With interest rates on new loans also climbing, newlyweds taking out new “Bogeumjari” loans now face higher principal and interest payments even when borrowing the same amount. Along with lowering the barriers to obtaining loans, there is a growing need to ensure that newlywed households can secure sufficient funds for living expenses and savings while repaying their loans over the long term.

According to data obtained by the office of Rep. Park Hong-bae of the Democratic Party of Korea—a member of the National Assembly’s Political Affairs Committee—from the Korea Housing Finance Corporation on the 13th, the average combined annual income of newlywed households using the “Bogeumjari” loan from January to August this year was 60 million won. Compared to 59 million won in 2024, this figure has remained virtually unchanged. In contrast, the average loan amount per case rose by approximately 30 million won, from about 246 million won to 276 million won. While income increased by 1.7%, the loan amount grew by 12.1%.

The Bogumjari Loan is a long-term, fixed-rate, installment-repayment policy mortgage provided by the Korea Housing Finance Corporation. It is generally available to households purchasing homes priced at 600 million won or less and with a combined annual income of 70 million won or less; for newlywed households, the income limit is relaxed to between 85 million and 100 million won, depending on the number of children. The loan limit is 360 million won for general households and 420 million won for first-time homebuyers. The interest rate set at the time of borrowing remains fixed until maturity, allowing borrowers to plan their repayments over the long term.

Even with these policy loans, the funds required to purchase a home are still substantial. The average value of the mortgaged home for newlywed households rose from 400 million won in 2024 to 430 million won this year. The average loan-to-value (LTV) ratio also increased from 65.3% to 66.5%. Not only has the average price of mortgaged homes increased, but the proportion of loans taken out has also grown. The share of loans exceeding 300 million won rose from 30.5% to 45.1% over the same period.

The size of loans has also increased among households with relatively lower incomes. The average loan amount for newlywed households with a combined annual income of between 30 million won and 40 million won rose from approximately 234 million won to 263 million won. As borrowing has increased even within this income bracket, striking a balance between funds allocated for repayment and those for daily living expenses has become increasingly important.

The rise in the average loan amount is also influenced by the growing proportion of first-time homebuyers—who typically take out larger loans—and buyers in the Seoul metropolitan area. Since the composition of borrowers varies by period, it cannot be concluded that this represents an increase in borrowing by individual households. However, the repayment capacity a couple had at the time of purchase is not guaranteed to remain the same throughout the loan term. This is because, even with a fixed interest rate, a couple’s income and living expenses can change over time.

Newlywed couples taking out loans must begin repayments amid higher interest rates. The interest rate on the “Bogeumjari” loan has risen five times this year, reaching a range of 4.9% to 5.2% annually. For homes in regulated areas, a 0.2 percentage point surcharge applies, bringing the rate to 5.1% to 5.4% annually. The actual interest rate varies depending on the loan product, term, and any preferential rates. While existing borrowers’ rates do not rise in tandem, new borrowers will have to pay more in principal and interest even when borrowing the same amount.

Assuming a 30-year loan of 280 million won with equal principal and interest installments, the monthly payment would be approximately 1.34 million won at an annual rate of 4%, but it would increase to about 1.5 million won at an annual rate of 5%. A 1 percentage point difference in the interest rate results in an additional monthly payment of about 160,000 won, or about 2 million won annually. Under these conditions, a household with an annual income of 60 million won would spend about 30% of its pre-tax monthly income of 5 million won on mortgage payments.

A banking industry official advised, “The amount you can borrow may differ from the amount you can actually afford, as loan underwriting considers not only the maximum loan amount but also living expenses and savings,” adding, “You should base your repayment plan on how much you have left after paying the monthly principal and interest, rather than on the maximum amount you can borrow.”

The Korea Housing Finance Corporation (KHFC) operates a program that allows users of the “Bogeumjari Loan”—who are experiencing temporary financial difficulties due to childbirth or leave of absence—to defer principal repayments for a certain period following an application and review process. However, interest must still be paid during the deferral period, and the deferred principal must be repaid in installments over the remaining loan term.

Rep. Park Hong-bae emphasized, “While the incomes of newlyweds remain stagnant, the amount they must borrow to purchase a home is steadily increasing,” adding, “The Homeownership Loan program must not only lower the barrier to first-time homeownership but also ensure that borrowers can repay their loans stably even during periods of reduced income. To this end, we must review the effectiveness of existing support systems and implement necessary reforms.”