The biggest fixed cost most months is loan interest. If you are still holding a mortgage taken at a high rate a few years ago, refinancing to a lower one changes what leaves your account every month. In Korea you can now do it entirely in an app.
1. What it costs. The biggest variable is the early repayment fee — the FSS example gives 1.5% if repaid within three years of drawdown, waived after three. On a ₩300 million loan that is ₩4.5 million, so the real question is how many months it takes to earn that back.
2. Where the risk is. Refinancing means a fresh assessment, so current rules apply in full — stage-3 stress DSR has applied since 1 July 2025, and since 16 October 2025 the stress rate is 3.0% in the capital region and regulated areas (1.50% elsewhere), so your limit may be lower than it once was. Variable-rate loans take the full 100% of that stress rate.
3. What to do. Two ways around the fee: you may repay up to 10% of the original principal each year without charge, and switching from variable to fixed at the same bank waives it. The in-app comparison takes about 15 minutes — run it first.
The rate alone should not decide it. What follows uses only what is verifiable in public-agency and professional-body sources.
Start with where rates actually are
Bank of Korea figures for November 2025, on newly extended loans:
“In November the weighted average household loan rate at deposit banks (newly extended basis) was 4.32%…”
“Within household loans, mortgages (4.17%), jeonse loans (3.90%) and general unsecured loans (5.46%) rose by 0.19pp, 0.12pp and 0.27 respectively.”
“The fixed-rate share of mortgages was 90.2%”
These are November 2025 figures. We opened the Bank of Korea's site on 21 September 2026 — it was not closed. The latest release is “Weighted Average Interest Rates, July 2026” (published 26 August 2026): on newly extended loans the bank lending rate is 4.27% (−0.04%p on the month) and the savings deposit rate 3.21% (+0.13%p), with the outstanding-balance lending rate at 4.37%. The fixed-rate share sits inside the release's attached document, which we have not carried across — so the 90.2% above is still the November 2025 figure. For context, the base rate rose from 2.50% to 2.75% on 16 July 2026 and to 3.00% on 27 August (checked 16 September 2026).
The refinancing infrastructure: since when, and for what
Online refinancing launched in 2023, starting with unsecured loans.
“You can compare loan products and terms from 53 financial companies”
“From installing the app to completing a new loan agreement takes about 15 minutes”
“Financial authorities plan to build refinancing infrastructure covering mortgages within the year” (31 May 2023)
It later extended to mortgages, and the scope widened:
“Over the 300 days from 31 May last year to the 25th of this month, 166,580 people used the loan-switching service to move a total of ₩7.4331 trillion of loans to lower rates.”
“From the 1st of next month apartment balance loans will be included, and from September villas and residential officetels with real-time valuations will be added.” (26 March 2024)
| Date | What changed |
|---|---|
| 31 May 2023 | Unsecured loans — 53 financial companies |
| 1 April 2024 | Apartment balance loans included |
| 1 October 2024 | Villas and residential officetels added (where a real-time valuation exists) |
The cumulative usage figure is as at 25 March 2024. Nothing later was verified.
| First 300 days (to 25 March 2024) | Figure |
|---|---|
| Users | 166,580 |
| Loans moved | ₩7.4331 trillion |
| Average per user (calculated) | about ₩44.6 million |
The per-user average is total ÷ users, not a published figure.
Prepayment fees — the rules changed in 2025
This is the variable that decides most refinancing calls. From the Financial Supervisory Service:
“A prepayment fee is the amount a consumer bears when repaying a loan before maturity. It applies for a certain period from the date the loan is extended and is applied differently by product and by timing.”
“Repaying within a set proportion (10%) of the original loan amount each year after the initial loan may be possible without a prepayment fee, or the fee may be charged differently according to the period remaining to maturity.”
“Example) repayment within 3 years: 1.5%; after 3 years: exempt”
“Converting a variable-rate mortgage to a fixed-rate loan at the same bank: prepayment fee exempt”
Two things follow:
- The 1.5% is labelled “Example)” in the source. It is not a statutory rate. Your own rate is in your loan agreement. On that example, repaying ₩300 million within three years costs ₩4.5 million (300m × 1.5%, our arithmetic).
- Up to 10% a year may be repayable without a fee. Even if you cannot move the whole balance, partial repayment can cut the principal.
And the rules were amended in 2025:
“Financial institutions had been charging prepayment fees uniformly without specific calculation standards, but an amendment to the Supervisory Regulation on Financial Consumer Protection prohibits charging anything beyond actual costs — losses from disrupted fund operation and loan-related administrative and origination costs.”
The post-amendment rates could not be verified. The FSS page carries no date, so we cannot even tell whether the “1.5% example” predates or follows the change. Check your own agreement and your bank.
If the question is how many months it takes to earn the fee back, the months are worth counting.
DSR rules set the ceiling
Refinancing means a fresh assessment, so current rules apply in full.
“From 1 July 2025, stage-three stress DSR applies to all household loans across every sector to which DSR applies.”
“The stress rate for stage-three stress DSR is 1.50%.”
“[Variable] applies the stress rate at 100%; [mixed] at 0–80% on a sliding basis; [periodic] at 0–40%.”
| Rate type | Stress rate applied | Effect on your ceiling |
|---|---|---|
| Variable | 100% | Tightest |
| Mixed | 0–80% sliding | Middle |
| Periodic | 0–40% sliding | Loosest |
The same income produces a different ceiling depending on which rate type you refinance into. Variable takes the full stress rate. That is part of why the fixed-rate share of mortgages has reached 90.2%.
Tightened again in October 2025 — a 3.0% stress rate
That 1.50% is the figure from stage three's launch in July 2025. The Financial Services Commission raised it again afterwards, for the capital region and regulated areas only.
“Raise the stress rate on capital-region and regulated-area mortgages (1.5% → 3.0%)”
“This measure applies to mortgages extended in the capital region and regulated areas (including officetel-secured loans).”
— Financial Services Commission, Financial Policy Division, “FAQ on loan demand management measures” (15 October 2025)
Regional properties are outside this measure. And it is not retroactive — the same document states that repayments on loans already drawn before the effective date (16 October) keep the stress rate in force when that loan was made, and that “the stress rate raised by this measure (3%) does not apply retroactively.” Extending an existing loan without increasing it, or refinancing within the same bank, does not trigger a fresh DSR assessment.
Limits and LTV moved in the same package.
| Item | Change | Effective |
|---|---|---|
| Mortgage limit (home purchase, capital region / regulated areas) | Tiered by market value — ₩600M up to ₩1.5bn; ₩400M from ₩1.5bn to ₩2.5bn; ₩200M above ₩2.5bn | 16 Oct 2025 |
| LTV (first-time buyers and conditional one-home owners in regulated areas) | 70% → 40% | 7 Sep 2025 |
| Stress rate (capital region / regulated-area mortgages) | 1.5% → 3.0% | 16 Oct 2025 |
| Jeonse loan DSR (existing homeowners, capital region / regulated areas) | Applied — but on the interest portion only | 29 Oct 2025 |
“A uniform ₩600 million in the capital region” no longer holds. June 2025's flat cap was split in October into three tiers by market value. Note also that living-expense-purpose mortgages are outside this package, as are interim-payment and relocation loans (relocation loans stay at ₩600 million).
Jeonse loan DSR counts interest, not principal. “In calculating the tenant's DSR, the principal of the jeonse loan is not included; only the interest portion is reflected.” The reason is stated too — the typical two-year term would make DSR absurd otherwise. The document's own example: a borrower earning ₩50 million taking a ₩100 million two-year jeonse loan would show 100% DSR on principal repayment alone. Whether it will extend to first-time renters has not been decided.
Regional mortgages had a deferral at stage two, extended to the end of June 2026 per reporting. The position after that could not be verified — ask your bank if the property is outside the capital region.
The stress rate depends on both region and rate type. On one axis, the ranking flips.
How to decide
- Compare your rate against 4.17% — the wider the gap, the bigger the case.
- Read the prepayment clause in your agreement — rate and remaining period. The FSS 3-year / 1.5% is only an example.
- Weigh interest saved against costs — run both rates through the loan calculator and compare total interest.
- Check your DSR ceiling — a variable-rate product takes the stress rate at 100%.
- Check preferential-rate conditions — salary transfers and card usage discounts may not survive a move.
On prepayment fees specifically, see the prepayment fee guide and the prepayment fee calculator. For the market backdrop see the 2026 Korean housing market, and on the rental side, negotiating the conversion rate.
Questions people ask
Do repeated rate checks lower my credit score?
The Financial Services Commission says checks inside the refinancing service do not count. Its May 2023 release launching credit-loan refinancing notes that “repeatedly checking loan terms on a platform or financial company app does not affect your credit score” (our translation). It later said that from 30 June 2023 switching a loan would not by itself change a score, and in January 2024 reported that borrowers who moved a mortgage to a lower rate saw scores rise 32 points on average (KCB). The “repeated checks” line appears in the credit-loan launch release; whether the mortgage service documents say the same was not verified. Applying separately to banks outside the service is outside that statement.
Do villas and officetels qualify?
Yes — since 1 October 2024. Per the FSC announcement of 30 September 2024, residential officetels and villas (row houses and multi-unit homes) with a real-time valuation qualify, and as with apartments you can switch once the existing loan is six months old. Loans in arrears or in legal dispute and low-rate policy loans are excluded. Twenty-nine financial companies took part at launch. (An earlier version only had the March “planned” line.)
What if I switch to fixed at the same bank?
The FSS gives the example that converting a variable-rate mortgage to fixed at the same bank is exempt from the prepayment fee. Worth asking your current bank before moving.
How much are stamp duty and registration costs?
Stamp duty is set by statute. Stamp Tax Act arts. 3 and 6: loans up to KRW 50 million are exempt; KRW 70,000 up to 100 million; 150,000 up to 1 billion; 350,000 above. The banks’ standard terms split it half and half with the customer (prepayment fee guide). Mortgage registration costs were not verified from a public-agency source — ask the bank for the all-in figure.
How does this differ from a rate-reduction request?
A rate-reduction request asks your existing bank to lower the rate because your credit improved. Refinancing moves you to another bank. Both are worth trying.
What is the LTV limit?
🔴 An earlier version said this could not be verified — but it was already in the table above. Per the FSC loan-demand FAQ, first-time buyers and conditional one-home owners in regulated areas go from 70% to 40% (from 7 September 2025), and mortgage limits are tiered by price: ₩600M up to ₩1.5bn, ₩400M up to ₩2.5bn, ₩200M above. Ratios for non-regulated areas and multi-home owners are not in that document, so none are given.
A loan agreement carries stamp duty — loans up to 50 million won are exempt, and it is charged per copy (stamp duty).
Sources and where to check
- Financial Services Commission (via Korea Policy Briefing) — officetel and villa mortgages join online refinancing (30 September 2024, Korean). Source of the 1 October start, 29 participants, the six-month rule and exclusions.
- Financial Services Commission — credit-loan refinancing launch release (30 May 2023, Korean): “repeated checks do not affect your credit score”. Press note (8 June 2023): no score change from switching alone from 30 June. Release of 30 January 2024: mortgage switchers up 32 points on average (KCB).
- Korean Law Information Center — Stamp Tax Act art. 3(1)2 (loan agreements, at the rates in item 1) and art. 6(8) (exempt up to KRW 50 million).
- Bank of Korea — Weighted Average Interest Rates, July 2026 (published 26 August 2026). Source of the 4.27% lending rate and 3.21% savings deposit rate on newly extended business, and the 4.37% outstanding-balance lending rate. Checked 21 September 2026 — the site opens.
- Financial Supervisory Service, FINE portal — before you prepay. Source of the definition, the 10%-a-year exception, the “Example) within 3 years 1.5%” and the fixed-rate conversion exemption. The page carries no date.
- Korean Association of Certified Public Tax Accountants newspaper — what changes in the new year (31 December 2024). Source of the 2025 amendment prohibiting charges beyond actual cost.
- Same newspaper — November household loan rate 4.32% (29 December 2025). Source of 4.17% / 3.90% / 5.46% / 90.2% (Bank of Korea, November 2025, newly extended basis).
- Same newspaper — online refinancing launches (31 May 2023) and apartment balance loans added (26 March 2024). Source of 53 companies · 15 minutes · 166,580 users · ₩7.4331tn · the expansion schedule.
- Same newspaper — what changes in H2 2025 (16 July 2025) and the strongest lending curbs yet (27 June 2025). Source of stage-three stress DSR at 1.50%, the 100 / 0–80 / 0–40% application and the ₩600m capital-region cap.
- Financial Services Commission, Financial Policy Division — agency source — “FAQ on loan demand management measures” (posted 15 October 2025). Source for the 1.5%→3.0% stress rate on capital-region and regulated-area mortgages, the ₩600M / ₩400M / ₩200M tiered mortgage limits, the 70%→40% LTV in regulated areas, the jeonse loan DSR and its interest-only basis, the non-retroactivity and the treatment of extensions and same-bank refinancing, and the exclusion of living-expense, interim-payment and relocation loans.
Written as of July 2026. The loan rates, the refinancing infrastructure’s launch, expansion and usage, the prepayment fee structure and its 2025 amendment, stage-three stress DSR and the capital-region cap all come from the sources above, and each figure was read twice with matching results. Five things could not be verified: (1) the actual prepayment rates after the 2025 amendment (the FSS page is undated, so even the “1.5% example” cannot be placed before or after); (2) mortgage registration cost amounts (stamp duty was checked on 22 September against Stamp Tax Act arts. 3 and 6 — exempt up to KRW 50 million, KRW 70,000 up to 100 million, 150,000 up to 1 billion, 350,000 above; how it is split with the bank is in the prepayment fee guide); (3) LTV for non-regulated areas and multi-home owners (the 40% for regulated-area first-time and conditional buyers is in the table above); (4) the position on regional mortgages after July 2026 (verified only that the deferral ran to end-June 2026). An earlier item (5), the effect of rate checks on credit scores, was filled on 22 September 2026 from FSC releases (whether the mortgage service documents say the same is unconfirmed). Rates and rules change often — confirm with your bank and the Financial Supervisory Service (1332). This is not financial advice.
