A truck drives between shipping containers at a container terminal at Incheon port in Incheon, Republic of Korea, May 26, 2016. (KIM HONG-JI / REUTERS)
SEOUL – The Republic of Korea will ease lending rules for first-time homebuyers and one-home owners to bolster the sluggish property market, the government said Thursday.
Eased regulations came amid rising worries about the faltering real estate market, which has been on the decline this year due to rapid interest rate hikes
The loan-to-value (LTV) ratio will be lifted to 50 percent in speculative districts for first-time homebuyers and single-home owners who plan to move into a new house, allowing them to borrow up to half of the home prices in mortgage loans from Dec 1.
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The ceiling on mortgage loans for homes worth more than 1.5 billion won (1.1 million U.S. dollars) will be lifted in speculative districts, according to the Ministry of Economy and Finance, the Financial Services Commission and the Ministry of Land, Infrastructure and Transport.
The zero-percent LTV ratio for multiple home owners will remain in speculative areas, while the 70 percent LTV ratio will continue to be applied to non-speculative regions.
The government lifted the designation of many areas in Gyeonggi province surrounding Seoul, as speculative and regulated areas.
Eased regulations came amid rising worries about the faltering real estate market, which has been on the decline this year due to rapid interest rate hikes.
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The country's central bank began to tighten its monetary policies in Aug last year, hiking its key rate in eight steps from a record low of 0.5 percent to 3.0 percent.