Three steps set your mortgage limit — how ₩10M of price split ₩210M of cash

Same bank, same day, neither of them owning a home, yet one was offered ₩600M while the other was offered ₩400M. The two homes were ₩10M apart in price.

It is easy to assume a mortgage limit scales with the price: a dearer home, a bigger loan. The structure is not that. The limit is not one calculation but three separate steps, each computed on its own, with the lowest of them becoming your limit.

The three steps are the ratio, the amount cap and income. They are not added together or averaged. The single lowest step becomes your limit. So if you do not know which step set yours, you cannot know what to change to raise it.

Start with step ①, the ratio. LTV is the percentage applied to the price. Two keys set that percentage, and the first is where the home is.

The second key is how many homes you own. In the same regulated zone, on the same home, it is 40% if you own none and 0% if you already own one. A first-time buyer goes up to 70%, which is 30%p above the 40% for a non-owner. Moving the ratio from 40 to 70 nearly doubles what the same home can borrow. From 31 August 2026, an unavoidable ownership history (inheriting a share of a home while still a minor, for instance) can be waived by the lender's credit committee so that first-time treatment still applies.

So step ① comes down to two checks: whether the home you want is in a regulated zone, and which box you fall into.

Next is step ②, the amount cap. This is the step that gave the lecture its title.

Mortgages in the capital area and regulated zones carry an amount cap set by price band: ₩600M up to ₩1.5bn, ₩400M from ₩1.5bn to ₩2.5bn, and ₩200M above ₩2.5bn. Within a band the cap is flat; at the boundary it drops all at once.

So a ₩1.5bn home and a ₩1.51bn home split at ₩600M against ₩400M. The price differs by ₩10M and what you can borrow differs by ₩200M. Exceed ₩1.5bn by even ₩1M and the outcome is the same. There is nothing in between.

In cash terms the gap widens further. Buying a ₩1.5bn home with ₩600M of debt takes ₩900M of your own money. Buying a ₩1.51bn home with ₩400M takes ₩1.11bn. The home costs ₩10M more and you need ₩210M more cash, 21 times the cause.

The same structure repeats at the ₩2.5bn boundary, where ₩400M is cut to ₩200M. If you are looking at homes near a boundary, check the price band before you sign. Negotiating ₩10M can decide ₩200M of cash.

Last is step ③, income. DSR sets the limit from the ratio of principal and interest to annual income. Banks work to 40% and second-tier lenders such as savings banks to 50%; this lecture uses the bank figure. One more thing attaches here.

The bank lends at 4.74% and underwrites at 7.74%, because a 3.0%p stress rate is added when computing DSR on mortgages in the capital area and regulated zones. That 3%p never reaches the interest you pay. Your monthly payment is unchanged; only what you may borrow shrinks.

So step ③ binds first the lower your income is. Conversely, with income to spare you pass step ③ and walk straight into the cliff at step ②. That is why the case above assumes an annual income of ₩130M: it holds DSR off the limit so that only the amount cap is left in view.

This matters. The amount cap binds regardless of income. A high income does not get you past it. If anything, a lower income means DSR sets the limit first and the cliff never shows.

Clearing all three steps is still not the end. A promise remains once the money is drawn. Take a mortgage in a regulated zone to buy a home and a duty to move in attaches. It is invisible when you compute the limit, but failing it can have the loan called in. That is why you weigh whether you can actually live there before you borrow.

To sum up, there are two things to do now. First, check the price band of the home you want and whether it sits in a regulated zone. Those two set step ① and step ②. Second, check in the calculator which step set your limit.

If the amount cap binds, raising your income will not raise the limit, so look at the price band. If DSR binds, look instead at your income and existing loans. Not knowing what binds means fixing the wrong thing.

One caveat: the price here is not the contract price but the home value the lender recognises. How that is assessed can differ between institutions, and this lecture covers ordinary bank mortgages. Policy loans such as Didimdol and Bogeumjari have their own terms, so confirm with the lender before you borrow.