Every apartment search hits the same fork: jeonse or monthly rent? Some swear jeonse always wins; others say monthly rent makes more sense now. The answer comes out when you run the numbers.
The comparison is one question: is the interest you'd earn (or pay) on the jeonse deposit bigger or smaller than the rent you'd hand over?
The key number: conversion rate
Conversion rate (%) = (monthly rent × 12) ÷ (jeonse deposit − rental deposit) × 100
Example — a ₩300M jeonse home offered at ₩100M deposit plus ₩800,000 monthly:
(800,000 × 12) ÷ (300M − 100M) × 100 = 4.8% per year
Compare that 4.8% with your loan rate or deposit rate and the decision follows.
How to read it
- Conversion rate > your loan rate → jeonse wins. Even paying loan interest costs less than the rent.
- Conversion rate < savings rate → monthly rent wins. Park the deposit and let interest cover the rent.
- Generally, a conversion rate above prevailing loan rates favors jeonse.
Run your actual jeonse loan interest in the loan calculator and compare it directly with the rent.
What the numbers miss
The downside of jeonse
- Deposit recovery risk — the big one. Reading the property register and guarantee insurance are essential.
- A large sum is locked up, unavailable for anything else.
- With a loan, you also carry interest-rate risk.
The upside of monthly rent
- No large sum tied up, and moving is easier.
- A smaller deposit means less at risk.
- Qualifying tenants can claim a monthly rent tax credit.
Add taxes and deductions
- Monthly rent — qualifying employees without a home can claim a rent tax credit, lowering the real cost.
- Jeonse — a jeonse loan can qualify for a deduction on principal and interest repayments.
So compare after tax, not just raw interest.
By situation
- Have the cash and staying a while → jeonse often wins (verify safety first).
- No lump sum or moving soon → monthly rent is more flexible.
- Deposit looks high versus market value → a hybrid (semi-jeonse) can lower the risk.
FAQ
Can landlords set any conversion rate?
Legal caps apply when converting an existing contract, though new contracts follow the market.
What about semi-jeonse?
It splits the burden between deposit and monthly outgo. Use the formula above to see which mix wins.
Isn't jeonse dangerous?
The risk lies in the specific property, not the structure. Register checks, guarantee insurance and the contract checklist cut it sharply.
Jeonse versus monthly rent isn't taste — it's arithmetic. Compare the conversion rate with your loan rate and the answer appears.
This is general information, not investment or legal advice. Rates and market prices shift and deduction eligibility varies — confirm before signing.
