Financing the Property Purchase

Find out about the financing options when purchasing a property in South Korea...

The three financing options are:

  1. Buy with cash: Pay in full with cash or via bank transfer.
  2. Mortgage: Finance the property with a mortgage from a Korean bank. There are strict regulations and conditions on mortgage financing when buying property in South Korea.
  3. Jeonsae (전세): Jeonsae is a uniquely Korean method of renting or leasing property. Often, when buying a house or apartment with no immediate intention to live there, Koreans will rent the apartment using Jeonsae. In a Jeonsae transaction, the lessee transfers to the owner approximately 50 percent of the value of the property as a deposit. The lessee does not usually pay any monthly rent to the owner, and is entitled to the return of the full deposit at the end of the lease period. Jeonsae is sometimes referred to as a "key money deposit". Jeonsae contracts, by law, have to be for a minimum of two years.
Information provided by Yun Je Lee, Associate Professor at Ajou University School of Law Attorney at Law in South Korea/California