June 16, 2024
Mortgage

Mortgage borrowers flock to refinance home loans online


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By Anna J. Park

The popularity of online mortgage refinancing loan services is soaring in the country, with over 1.3 trillion won ($970 million) worth of requests for transferring housing loans to other lenders having been made in just a few days since the service’s launch in the past week.

According to the Financial Services Commission (FSC) on Thursday, borrowers using the online home mortgage refinancing service have reduced their interest rates by 1.5 percentage points on average, resulting in an annual savings of some 3.37 million won per person.

The top financial regulator explained that a total of 5,657 borrowers applied to switch their mortgage loans totaling 1.3 trillion won in just four days since the online service began on Jan. 9. The service allows borrowers to transfer their home mortgage loans to other lenders offering better interest rates, by simply browsing on their smartphones without face-to-face interaction.

As the service invites fiercer competition among banks to attract and retain mortgage loan customers, the average interest rate for home mortgage loans dropped to the 3 percent range.

Most banks are currently offering interest rates in the mid- to upper 3 percent range for home mortgage refinancing products. Lenders that offer lower interest rates are regional banks and internet-only banks.

For instance, Daegu Bank offers rates for refinancing mortgage as low as the annual rate of 3.1 percent, followed by BNK Kyongnam Bank at 3.39 percent and Kwangju Bank at 3.45 percent. KakaoBank and K bank also present rates of 3.412 percent and 3.6 percent, respectively.

Refinancing for home mortgage loans can be done through various mobile platforms, including each mobile application provided by banks or insurance companies, as well as fintech platforms such as Naver Pay, Kakao Pay, Toss and Finda.

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Meanwhile, Naver Pay announced on Thursday that its home mortgage refinancing service has attracted about 22,000 comparison queries for refinancing loans totaling over 3.9 trillion won within just six business days since its launch on Jan. 9.

Currently, the online mortgage loan refinancing service is only available for apartments valued below 1 billion won, while jeonse loan services are scheduled to commence on Jan. 31.



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