Newly married couples whose combined income exceeds the ceiling for Korea's Bogeumjari Loan will still qualify for the policy mortgage if either spouse earns 70 million won ($50,000) or less a year. The change is meant to ease what is known as the "marriage penalty," in which couples lose access to government-backed loans once their incomes are counted together.
The Korea Housing Finance Corporation said on the 28th that it would revise the income criteria for newlywed households. The new rules apply to loan applications filed from Oct. 19.
The Bogeumjari Loan is a long-term, fixed-rate mortgage with amortized repayment provided by the state-run corporation. Applicants are classified as newlywed households if they apply within seven years of registering their marriage or are due to marry within three months of the application date.
Under current rules, couples with combined annual income of 70 million won or less can apply when buying a home priced at 600 million won or less. For newlyweds, the ceiling rises to 85 million won for couples without children, 90 million won for those with one child and 100 million won for those with two or more.
Going forward, couples who exceed those limits can still use the program as long as one spouse earns 70 million won or less a year.
How the Income Rules Change for Newlyweds
Take a newly married couple with no children, one earning 40 million won a year and the other 50 million won. Their combined income of 90 million won exceeded the 85 million won ceiling, disqualifying them under the old rules. Now they can borrow as long as one spouse earns 70 million won or less.
When a couple exceeds the combined-income ceiling and relies on the single-earner standard, the spouse earning 70 million won or less must apply directly and become the borrower. Repayment capacity will also be assessed on that borrower's income and debt rather than the couple's combined figures.
The corporation said it will still check the other spouse's income and debt during screening to verify eligibility for preferential rates and owner-occupier requirements, and will count homes owned by both spouses when determining how many properties the household holds.
"We will continue to review and improve policy loan support so that nothing is lacking in helping young adults secure stable housing," said Kim Kyung-hwan, president of the Korea Housing Finance Corporation.
