Korean Jeonse Deposit Guarantee Premium Calculator

This calculator works out the premium for a jeonse deposit return guarantee. Enter the deposit, the annual rate the institution quoted you, and the period of cover, and it shows the total premium for that period, one year's worth, and what it comes to each month. It also expresses the premium as a percentage of the deposit.

A return guarantee is an arrangement under which a guarantee institution pays your deposit back if the landlord fails to when the lease ends, and then pursues the landlord for it. The tenant pays a premium for that protection. This calculator deliberately does not contain a rate table. The rate is not fixed by law; it is set separately by the Korea Housing & Urban Guarantee Corporation (HUG), the Korea Housing Finance Corporation (HF) and Seoul Guarantee Insurance (SGI), and changed often. Hard-coding a figure would make it wrong the moment it changed, so the page gives you the formula and the range and asks you to enter the rate for your own case.

Tenants deciding whether to buy a return guarantee before signing a jeonse lease. When an adviser says "so many percent a year", this shows what that actually means in won, and what a standard two-year lease will cost in total. Seeing the premium spread across each month, like rent, makes it easier to judge whether the cover is worth it for the deposit at stake.

It is also useful for anyone who has collected quotes from all three institutions. Keep the deposit and period the same, change only the rate, and the difference in cost is immediately visible. It also helps when a renewal extends the cover, or an early move shortens it, and you want to know how the premium changes.

The best-known product is run by HUG, which was established under 주택도시기금법; HF and SGI sell guarantees of the same kind. Each institution publishes its own rates. HUG's jeonse deposit return guarantee rate sits between 0.097% and 0.211% and depends on the combination of the deposit band, whether the home is an apartment or another type of dwelling, and the property's debt ratio. A higher debt ratio or a non-apartment home pushes the rate up.

The arithmetic is straightforward. First, multiply the deposit by the annual rate to get one year's premium. Next, convert the cover period into days: this calculator treats a month as one twelfth of 365 days and multiplies by the number of months. Finally, multiply the annual premium by the number of days divided by 365 to get the total for the period. The monthly figure is that total divided by the number of months, and the burden rate is the total divided by the deposit.

The point that matters is that the rate is annual. The figure an institution quotes is for one year of cover, so a two-year lease costs twice that. When you actually apply, each institution has its own way of counting the period and rounding, so the real premium may differ from this result by a few hundred won.

Take a deposit of ₩300 million, an annual rate of 0.154%, and a standard two-year lease of 24 months. One year's premium is ₩300 million times 0.154%, or ₩462,000. Twenty-four months is 730 days, and 730 divided by 365 is exactly 2, so the total premium is twice ₩462,000, or ₩924,000. Spread across the lease that is ₩38,500 a month, and as a share of the deposit it is 0.308%.

Shorten the cover to 12 months on the same terms and the total is simply one year's worth, ₩462,000: the same rate over half the period costs half as much. Go the other way and suppose your case attracts the top of HUG's range at 0.211%. One year on the same ₩300 million deposit then costs ₩633,000, and two years ₩1,266,000. A small difference in the rate becomes several hundred thousand won once it is compounded over a two-year lease.

The most common mistake is reading the rate as covering the whole lease. People see 0.154% on ₩300 million, think "about ₩460,000", sign up, and are surprised by a bill for two years' worth of ₩920,000. The rate is always per year.

The second is assuming that buying the guarantee makes the moving-in report and fixed-date stamp unnecessary. The guarantee is what pays out when the landlord does not; opposability against third parties and your preferential right to repayment are separate rights that only you can establish. Institutions normally require the moving-in report and fixed-date stamp as a condition of cover in any case, and without them a claim can fail.

The third is not checking for discounts. Reduced premiums exist for low-income households, newlyweds, families with several children, older tenants and others, and some local governments subsidise the premium for young tenants. Ask whether you qualify before you enter a rate, because it lowers what you actually pay. Finally, the range shown here is HUG's, so if you are buying from HF or SGI, get that institution's rate and enter it instead.