South Korea Delays Ultra-Long-Term Mortgage Plan Amid Housing Market Concerns
Seoul, South Korea – March 14, 2026 – Plans to introduce 30-year ultra-long-term fixed-rate home mortgage loans in South Korea have been postponed, as the government prioritizes stabilizing the real estate market and regulating loans for multiple homeowners. The delay comes after President Lee Jae-myung urged stronger measures to address concerns about housing affordability and market speculation.
Shift in Focus: Real Estate Stabilization Takes Priority
The Financial Services Commission (FSC) had initially intended to unveil the long-term mortgage plan alongside its annual household debt management plan in late February. This plan, developed by the ‘TF for revitalizing long-term fixed interest rates’, aimed to address structural issues within household debt and enhance financial stability. But, President Lee Jae-myung’s call for stricter regulations on loans for individuals owning multiple properties prompted a shift in priorities.
The Risk of Variable Rate Mortgages
Currently, a significant portion of mortgages in South Korea are 5-year mixed or 5-year periodic, exposing borrowers to increased financial strain when market interest rates rise. A high proportion of variable-rate mortgages poses a systemic risk to the financial system, particularly during periods of external economic shock. Ultra-long-term fixed-rate mortgages were seen as a way to mitigate this risk.
Regulatory Measures for Multi-Homeowners
The FSC has completed its assessment of loans held by multi-homeowners and rental businesses and is preparing comprehensive regulatory measures. Stopping the extension of maturities on apartment loans held by multiple homeowners in Seoul and the surrounding metropolitan area could lead to over 10,000 properties being listed for sale within the year, potentially impacting the housing market.
Challenges to Long-Term Fixed Rate Adoption
The postponement also reflects concerns about the practicality of 30-year ultra-long-term fixed-rate mortgages in the current economic climate. With the base interest rate reduction cycle appearing to have ended, the attractiveness of these products is diminished. Current five-year fixed mortgage rates from the five major banks exceed 6%, making longer-term fixed-rate options with potentially higher interest rates less appealing to consumers.
An official from the financial sector noted that even with government support, private financial companies may be hesitant to actively launch these products given the current interest rate environment.
Looking Ahead
The financial authorities maintain that stabilizing the housing market remains the most pressing concern. The timing of the 30-year ultra-long-term fixed interest rate mortgage plan will be reconsidered once the situation stabilizes. The government continues to assess the effectiveness of various measures to manage household debt and ensure financial stability in South Korea.