HOUSING UTILITY
Korean Jeonse Deposit Calculator (Korean-specific)
Calculate your required loan amount and out-of-pocket cash deficit when securing a home under South Korea's unique "Jeonse" key-money rental system.
Please enter a valid deposit amount.
Please enter a valid cash amount.
Enter a ratio between 10% and 100%.
Guide to Korea's Jeonse System & Loans
What is the "Jeonse" System?
Jeonse (전세), often called "key money," is a real estate lease system unique to South Korea. Instead of paying monthly rent, the tenant deposits a large sum (usually 60% to 80% of the property's market value) with the landlord for the duration of the contract (typically 2 years). The landlord holds this interest-free deposit and returns it in full when the lease ends.
How Jeonse Loans Work
Because Jeonse deposits can be extremely high, most tenants (including foreigners residing in Korea) obtain a Jeonse Loan (전세자금대출) from a bank.
- Standard Borrowing Ratio: Most commercial banks and government programs (like the Hug or HF guarantees) cover up to 80% of the deposit amount.
- Loan Equation: The required loan covers the gap between your cash and the deposit, capped at the bank's maximum ratio.
- Additional Equity Needed: If your cash plus the maximum loan does not equal the deposit, you must secure the remaining cash (often called "equity deficit") independently.
A Typical Calculation Example
Example:
- Jeonse Deposit: ₩200,000,000 (~$150,000 USD)
- Your Cash Savings: ₩60,000,000
- Loan Ratio Limit: 80% (meaning max loan is ₩160,000,000)
Results:
- Required Loan: ₩140,000,000 (since you only need ₩140,000,000 to cover the rest of the ₩200,000,000 deposit)
- Additional Cash Needed: ₩0 (your savings of ₩60,000,000 + loan of ₩140,000,000 fully funds the deposit)
Frequently Asked Questions (FAQ)
Can foreigners get Jeonse loans in South Korea?
Yes. Foreigners holding valid visas (such as F-2, F-4, F-5, F-6, or certain work visas) and registered alien cards can qualify for Jeonse loans. However, banks apply strict credit rating and income checks, and loan limits might be lower than for Korean citizens.
What is Jeonse fraud (Jeonse Saghi) and how can I protect myself?
Jeonse fraud involves situations where a landlord fails to return the deposit at the end of the lease, often because the property's debt exceeds its market value. To protect yourself, always buy **Jeonse Deposit Return Guarantee Insurance** (반환보증보험) from HUG (Housing & Urban Guarantee Corporation) or SGI Seoul Guarantee.
How much down payment (contract fee) is required?
When signing the rental contract, you must pay a contract fee (계약금) of at least **5%** of the total deposit to the landlord. You will need to show the bank the official receipt of this payment to apply for the Jeonse loan.