The Financial Services Commission and the Financial Supervisory Service announced on Jan. 7 that the same loan regulations such as the same loan-to-value (LTV) ratio are being applied to both locals and foreigners taking out mortgage loans from South Korean financial institutions.
The announcement was to respond to recent rumors that foreigners are not subject to the regulations. “We are currently applying the regulations without any exception or blind spot, and we are keeping a close eye so that the regulations are not circumvented,” the financial authorities said. These days, rumors are circulating in some online communities that foreigners are subject to no LTV ratio regulations, and they are purchasing a large number of expensive apartments in Seoul by taking out loans.
“A company taking out a loan for business purposes and using it to purchase a house constitutes appropriation, and the money can be immediately collected in that case,” they added.