NH NongHyup Bank to reopen mortgage refinancing, 40-year loan terms

NH NongHyup Bank will lift three of its own mortgage-related restrictions starting Monday, marking its second round of easing since it resumed new variable-rate mortgage lending last Wednesday. The moves reflect a broader trend of banks gradually lowering their lending barriers following the financial regulator's decision to raise the household debt growth ceiling.

According to financial industry sources, the bank will ease three restrictions on Monday: a ban on in-person cross-bank mortgage refinancing, a 30-year cap on in-person household mortgage terms outside the Greater Seoul area, and limits on mortgage credit guarantee (MCG) products for home loans. "The measures are aimed at strengthening support for borrowers with genuine housing needs," a bank official said.

All three restrictions were introduced earlier this year as temporary measures to manage household loan volume. The bank barred in-person refinancing from other banks on May 20, then cut the maximum loan term for in-person mortgages in non-metropolitan areas from 40 years to 30 years starting June 1. On June 12, it temporarily suspended MCG enrollment for mortgages other than policy loan products.

The easing is expected to improve the borrowing limits and rate conditions that borrowers experience in practice. Extending the maximum term from 30 to 40 years reduces annual principal and interest payments, creating more room under the debt service ratio (DSR) calculation and allowing borrowers to take out larger loans. MCG replaces the so-called "room deduction" — the subtraction of the priority small-tenant deposit from the mortgage limit — with a Korea Housing Finance Corporation guarantee, enabling borrowers to borrow up to the full loan-to-value ratio (LTV) limit. Reinstating MCG enrollment will effectively expand the available LTV ceiling for some borrowers. Reopening cross-bank refinancing broadens the options for existing borrowers looking to switch to lower-rate products.

The bank's suspension of mortgage credit insurance (MCI) products, however, remains in place.

The easing comes after the Financial Services Commission announced a comprehensive set of real estate market stabilization measures on Aug. 13, doubling the annual household debt growth management target from 1.5 percent to 3.0 percent. The move is estimated to have created roughly 30 trillion won in additional lending capacity across the financial sector as a whole, and about 7.5 trillion won ($5.42 billion) among the five major banks — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.