A new proposal suggests imposing a fee based on a percentage of the loan amount in addition to interest when obtaining a mortgage. This approach aims to curb demand by increasing borrowing costs rather than directly reducing loan limits. Critics argue that this could further burden genuine borrowers amid rising interest rates and stricter lending criteria.
According to the financial sector, the Financial Services Commission introduced the concept of a 'macroprudential management fee' during a real estate finance policy discussion held on July 15.
The macroprudential management fee would require borrowers to pay a percentage of the loan amount as a fee in addition to the mortgage interest. For example, a fee of 1% would apply to loans for homes priced between 500 million and 1.5 billion won, while a 2% fee would be imposed on loans for homes exceeding 1.5 billion won. This method seeks to discourage loan demand by increasing borrowing costs rather than implementing quantitative restrictions on loan limits.
Similar to the foreign exchange stability fee introduced to curb excessive short-term foreign currency borrowing by banks, this fee would serve a specific policy purpose.
Kim Young-do, a senior researcher at the Korea Financial Research Institute, who proposed the idea, stated, "The specifics of the system could vary, but the basic idea is to require an additional fee beyond interest payments. This could be paid monthly or in a lump sum at the time of loan execution."
A similar concept was suggested in a report published by the Capital Market Research Institute in July of last year. Senior researcher Kang Hyun-joo argued that existing regulations focused on total volume and the debt service ratio (DSR) alone are insufficient to stabilize household debt, emphasizing the need for price-based regulations that impose the social costs of excessive borrowing on borrowers.
The discussion of such measures arises as household loan demand remains resilient despite stringent regulations from financial authorities and self-management by banks. The argument is that merely reducing loan limits has its limitations, necessitating new regulations that increase borrowing costs.
However, there are concerns in the market that if implemented, the new system could excessively burden borrowers. With interest rates already rising due to increases in the base rate and adjustments in bank margins, adding a fee of this nature could further strain borrowers.
Under the proposed system, a borrower taking out a loan of 600 million won to purchase a home priced over 1.5 billion won would need to pay an additional fee of 12 million won, which is 2% of the loan amount. This means they would have to secure additional funds on top of the monthly loan interest and principal repayments.
Particularly concerning is the potential impact on first-time homebuyers or those purchasing homes for personal use, as imposing the same fee on them could create a one-size-fits-all regulation that fails to distinguish between speculative and genuine demand. If fees are based solely on home prices and loan amounts, factors such as income, assets, and actual residency may not be considered.
Nonetheless, financial authorities clarified that they are not currently considering the implementation of this system. A Financial Services Commission official stated, "We view this as one of several ideas presented at the discussion and are not at a stage to publicize or review it for policy implementation."
* This article has been translated by AI.
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