Ban on Maturity Extensions for Multi-Homeowners' Apartment Mortgages in the Seoul Metropolitan Area... Exceptions for Tenant Occupancy and Daycare Centers

Government Holds Household Debt Review Meeting
Stricter Loan Regulations for Multi-Home Owners Announced 47 Days After President Lee’s Order
Loan Repayment Exceptions for Tenant Protection and Public Interest Purposes

The government has decided to, in principle, prohibit the maturity extension of mortgage loans for multi-home owners who hold apartments in the Seoul metropolitan area and other regulated zones, starting from April 17, 2026. Exceptions will be granted when the property serves a public purpose or is used for facilities such as daycare centers. In addition, a protective measure has been introduced to defer loan repayment until the expiration of the lease contract for homes with tenants currently residing in them.

This measure was abruptly announced 47 days after President Lee Jaemyung ordered stricter loan regulations for multi-home owners on February 13, 2026. The government estimates that this new policy will affect loans reaching maturity this year amounting to approximately 2.7 trillion won and about 12,000 housing units. As a result, it is expected that these properties could be released onto the market.

Mortgage Loan Extensions Prohibited for Multi-Home Owners in the Seoul Metropolitan Area and Regulated Zones

On April 1, 2026, at the Seoul Government Complex, the Financial Services Commission, Ministry of Economy and Finance, Ministry of Land, Infrastructure and Transport, Ministry of the Interior and Safety, National Tax Service, Bank of Korea, and Financial Supervisory Service jointly held a “Household Debt Review Meeting” and finalized these measures.

The core of the policy is that maturity extensions will, in principle, not be permitted for mortgage loans held by individual multi-home owners and rental business operators for apartments in the Seoul metropolitan area and regulated regions. This applies to both individuals and corporate rental business operators who own two or more properties, regardless of location.

Previously, existing loans taken out before these regulations were introduced could be automatically extended upon maturity. However, going forward, extensions will be restricted to ensure fairness with new loans. For those who already own homes in these regions, the government has already applied a loan-to-value (LTV) ratio of 0% for new loans since the June 27 and September 7 measures last year.

Exceptions for Public Purpose and Daycare Centers... Tenant Protection Measures Also Included

The government will allow exceptions only in cases where the property has tenants or is recognized as serving a public interest, making it difficult to sell. Properties under a sales contract, daycare centers, and unsold units after completion will be excluded from the count of properties owned when determining multi-home ownership status.

Furthermore, to protect tenants, loan repayments on properties where tenants currently reside will be deferred until the lease contract expires. Lease contracts that are valid as of April 1, 2026, and those implicitly renewed by April 16, 2026, will be eligible for maturity extension. If a right to renew a lease contract expiring by July 2026 is exercised, the loan extension will also be allowed until the new contract’s expiration date.

Additionally, the government will allow non-homeowners to purchase homes currently occupied by tenants. If a non-homeowner applies for a land transaction permit by the end of this year and acquires the property within four months from the permit date, the obligation to actually reside in the property will be deferred until the lease ends.

Other exceptions include daycare centers, private rental REITs, public interest foundations, and mandatory rental business operators serving public purposes, as well as cases where immediate sale is not possible under the law or when prior notice of maturity extension has already been given. These new regulations will take effect from April 17, 2026. If borrowers fail to repay, financial institutions will require the disposal of the property within a certain period.

Loans Ineligible for Extension Total 4.1 Trillion Won... This Year, 2.7 Trillion Won and 12,000 Units to Impact the Market

The government aims to encourage multi-home owners to list their properties on the market through these measures. The total outstanding balance of bullet repayment loans that will not be eligible for maturity extension across the entire financial sector is estimated at about 4.1 trillion won, affecting approximately 17,000 housing units. Of these, loans maturing this year are estimated at 2.7 trillion won, covering around 12,000 units. As a result, it is expected that about 10,000 additional homes will be supplied to the market in the Seoul metropolitan area and regulated zones this year.

Meanwhile, these new measures do not include restrictions on non-resident owners of a single home. Since President Lee has previously raised the need for managing non-resident single-home owners who own property for investment or speculative purposes, the government is considering additional measures, such as restricting public guarantees on jeonse (lump-sum deposit) loans. However, due to various genuine demand factors, such as education, employment, and caring for elderly parents, the government plans to review the matter further and announce separate measures at a later date.

This content was produced with the assistance of AI translation services.