Loan Interest

Equal payment (원리금균등): you pay the same total amount every month, with the interest-to-principal ratio shifting over time. Equal principal (원금균등): the principal is split evenly across all payments, so interest decreases each month — but your initial payments are higher.

With balloon repayment, you pay interest only each month and repay the entire principal as a lump sum at the end of the loan term.

Equal principal (원금균등) repayment results in the lowest total interest. Because the principal is paid down evenly each month, the outstanding balance drops faster and interest charges decrease accordingly. On a ₩300M loan at 4% over 30 years, equal principal can save over ₩10M in total interest compared to equal payment (원리금균등) — though initial monthly payments are higher.

The most effective strategies are: ① Shorten the repayment term, ② Choose equal principal repayment, ③ Make lump-sum prepayments whenever you have spare cash, ④ Exercise your right to request a rate reduction (금리인하요구권). Even a 0.5% rate cut on a ₩300M 30-year loan saves approximately ₩26M in total interest.

LTV (Loan-to-Value) is the maximum loan amount as a percentage of the property's appraised value — typically capped at 50–70% depending on the regulated zone. DSR (Debt Service Ratio) limits total annual loan repayments across all debts to a percentage of annual income, generally 40%. As of 2026, consult the Financial Supervisory Service or your bank for the latest regulation details.