Will Lee Jae Myung's Real Estate Solution Emerge? Attention on Introducing a 'Fee' for Large Mortgage Loans

[Financial News] President Lee Jae Myung will hold a large-scale forum to discuss the direction of real estate policy, including housing supply, lending regulations and taxes. As a plan to impose a separate "macroprudential management fee" on large mortgage loans has recently emerged, attention is focused on whether the forum will lead to a full-scale push for its introduction.
According to the financial sector on the 23rd, the Financial Services Commission (FSC) is considering a plan to impose a "macroprudential management fee" as one of the ideas for designing household debt management policy. There is also discussion of applying it first to housing loans for multi-home owners.
The macroprudential management fee, which would impose an additional cost on high-value mortgage loans, emerged as a new alternative to real estate regulation when it was proposed at the "Public Hearing on Real Estate Financial Policy" held on the 15th. The idea is to curb demand for high-priced homes by charging a fee of 0% to 2% depending on the size of the loan.
For example, if a home is worth between 500 million won and less than 1.5 billion won, a fee of 1% of the loan amount would be charged. For homes worth 1.5 billion won or more, the fee would be 2% of the loan amount. In that case, if a buyer takes out a 600 million won loan to purchase a 1.5 billion won apartment, they would have to pay 12 million won, or 2% of the loan amount, as a fee.
At the forum, Kim Young-do, a senior research fellow at the Korea Institute of Finance (KIF), explained, "Until now, financial policy has focused on reducing the 'volume' of loans, but going forward, we also need to regulate the 'price' of loans." He added, "Since loans are a social resource, requiring borrowers to bear a certain cost could help ease some volume-based regulations while still curbing loan demand."
The reason this measure was proposed is the view that the current macro-level aggregate lending controls and micro-level regulations centered on the Debt Service Ratio (DSR) have limits in stabilizing household debt. According to the FSC, household loans across the financial sector rose by 8.3 trillion won last month from the previous day, widening the increase from 6.5 trillion won a year earlier. In particular, household lending at banks rose sharply, marking the largest increase in 22 months.
However, some observers worry that if the management fee is actually imposed, it could amount to de facto triple taxation and increase the burden on end users. There are also concerns that if high-priced homes are purchased with cash rather than loans, no fee would be charged, which could favor the cash-rich.
Others say that if the management fee is introduced, the burden could be passed on not only to buyers of high-priced homes but also to the broader market. They argue that the policy goals and effectiveness should be carefully reviewed before the system is adopted.
Kim Miru, a research fellow at the Korea Development Institute (KDI), said, "The intention is to impose a burden only on high-value mortgage loans, but in reality the cost may be reflected in interest rates and other terms, so the effect may not be limited to the intended target." She added, "We need to clearly define the policy goal first, whether it is stabilizing home prices, managing household debt or reducing housing inequality."

[email protected] Lee Jumi Reporter