**6/27 Measures Limited Refinance Loans to 100 Million Won, Now Lifted…Criticism of Reversing ‘Interest Burden Relief’ Efforts**
**Third Real Estate Measure Announced: Mortgage Cap Set at 400 Million Won for Houses Over 1.5 Billion Won**
(Seoul = Yonhap News) Reporter Shin Hyun-woo – On the 15th, the government announced a real estate market stabilization measure. A citizen visits a local bank in Seoul for consultation. 2025.10.15
(Seoul = Yonhap News) Reporter Kang Su-ryeon – In the 10/15 real estate policy, financial authorities decided to include ‘refinance loans’—used to switch existing mortgage loans to other loan products—under the loan-to-value (LTV) ratio regulation.
Critics argue that blocking “loan switching” at lower interest rates goes against the government’s policy to mitigate interest burden.
According to materials submitted to Representative Choo Kyung-ho of the People Power Party, from the Financial Services Commission (FSC) on the 22nd, the FSC answered “refinance loans are treated as new loans at a new financial company, so LTV is recalculated at the time of switching according to the supervisory regulations of each sector.”
Even if borrowers pay off existing loans and switch to lower-interest loan products, these are still subject to LTV regulations, hindering “loan switching.”
With all of Seoul and 12 regions in Gyeonggi newly designated as regulated areas, borrowers in these areas must partially repay existing principal to get refinance loans as the LTV ratio is reduced from 70% to 40%.
During the 6/27 loan regulation, the government capped mortgage loans for living stabilization at 100 million won, including refinance loans, which sparked controversy.
Although the 9/7 measure allowed existing mortgage holders to opt for refinance loans, a similar situation is repeating with the 10/15 measure.
Thus, contrary to the government’s “mitigating the interest burden for ordinary citizens” stance, criticisms that loan regulations are increasing the burden on low-income and real demand borrowers are expected to continue.