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Getting a mortgage as a foreigner in South Korea has become more restrictive since August 2025, particularly for non-residents purchasing in Seoul and major metropolitan areas.
While multiple banks offer mortgage programs to foreigners, the requirements are significantly stricter than for locals, with higher down payments of 30-40% and more complex documentation processes. Recent regulatory changes also require non-resident foreigners to obtain government permits and commit to residing in the property for at least two years when purchasing residential properties in Seoul and parts of Gyeonggi and Incheon provinces.
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Foreigners can obtain mortgages in South Korea but face stricter requirements including 30-40% down payments, loan-to-value ratios of 60-70%, and mandatory long-term visa status.
As of September 2025, new regulations require non-resident foreigners to secure government permits and commit to two-year residency for purchases in Seoul and major metropolitan areas.
| Aspect | Foreigners | Local Citizens |
|---|---|---|
| Minimum Down Payment | 30-40% | 10-20% |
| Maximum LTV Ratio | 60-70% | Up to 80-90% |
| Interest Rates | 2-6% (can be higher) | 2-5% |
| Processing Time | Several weeks | 1-2 weeks |
| Visa Requirement | Long-term visa mandatory | Not applicable |
| Residency Requirement (Seoul/Metropolitan) | 2-year minimum commitment | None |
| Government Permit Required | Yes (non-residents in restricted areas) | No |
What types of properties in South Korea are foreigners actually allowed to buy?
Foreigners can purchase virtually all property types in South Korea including apartments, detached houses, townhouses, multi-unit buildings, and land.
The South Korean government allows foreign ownership on terms very similar to local citizens, with only specific restricted zones such as military areas and cultural heritage sites being off-limits. Commercial properties like officetels (office-residential hybrids) remain fully accessible to foreign buyers without additional restrictions.
However, as of August 2025, new regulations significantly impact non-resident foreign buyers in key metropolitan areas. Non-resident foreigners are now banned from purchasing residential properties in Seoul and parts of Gyeonggi and Incheon provinces unless they obtain government permits and commit to residing in the property for at least two years.
These residency requirements only apply to residential properties, meaning commercial real estate, including officetels, remains exempt from the new restrictions. The regulations specifically target speculative foreign investment while still allowing genuine residents to purchase homes.
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Do banks in South Korea lend to foreigners for both apartments and houses, or only certain property types?
Major South Korean banks including KEB Hana, Shinhan, Woori, KB Kookmin, and Jeonbuk Bank offer mortgages to foreigners for both apartments and detached houses.
These banks typically provide loans for all standard residential property types, though they apply stricter terms and requirements compared to loans for Korean citizens. Regional banks also participate in foreign lending but may offer different interest rates and terms.
Commercial-residential hybrid properties like officetels are generally more accessible for foreign mortgage applications since they fall outside the residential purchase restrictions. Banks view these properties as lower-risk investments due to their commercial classification and rental income potential.
Specialized branches or loan officers dedicated to foreign customers operate in major cities like Seoul and Busan, providing better service and understanding of international documentation requirements. However, each bank maintains its own eligibility criteria and may restrict lending based on visa type, income source, or property location.
What is the minimum down payment percentage that foreigners usually need to provide?
Foreigners typically need to provide 30-40% of the property purchase price as a down payment in South Korea.
This requirement is significantly higher than for Korean citizens, who may qualify for down payments as low as 10-20%, especially first-time buyers with government support programs. The higher down payment requirement reflects banks' risk assessment of foreign borrowers who may have limited credit history in Korea.
Some banks may require even higher down payments of up to 50% depending on the applicant's visa status, income stability, and property type. Borrowers with permanent residency or long-term employment contracts in Korea may negotiate slightly lower down payment requirements.
The exact percentage can vary between banks and individual circumstances, with some regional banks offering more flexible terms but potentially higher interest rates. Property location also influences down payment requirements, with properties in Seoul often requiring higher initial payments than those in smaller cities.
What are the maximum loan-to-value ratios available to foreigners compared to locals?
| Borrower Type | Maximum LTV Ratio | Typical Range |
|---|---|---|
| Korean Citizens (First-time buyers) | Up to 90% | 70-80% |
| Korean Citizens (Regular buyers) | Up to 80% | 60-70% |
| Permanent Residents | Up to 70% | 60-70% |
| Long-term Visa Holders | Up to 70% | 50-60% |
| Other Foreign Residents | Up to 60% | 40-50% |
| Non-resident Foreigners | Up to 50% | 30-40% |
Are mortgage interest rates for foreigners higher than for South Korean citizens, and by how much on average?
Mortgage interest rates for foreigners in South Korea typically range from 2-6%, which can be similar to rates for Korean citizens but often include additional risk premiums.
Major banks like KEB Hana and Shinhan generally offer competitive rates to well-qualified foreign borrowers, particularly those with permanent residency or stable local employment. However, foreign borrowers may face rate premiums of 0.5-2% above standard rates depending on their visa status and credit profile.
Regional banks sometimes charge significantly higher rates for foreign borrowers, with some products reaching 11-15% when credit risk evaluation proves difficult. These higher rates typically apply to borrowers with limited Korean credit history or temporary visa status.
Interest rates also vary based on loan terms, with shorter-term loans often receiving better rates. Foreign borrowers with substantial down payments and stable income documentation can negotiate rates closer to those offered to Korean citizens.
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Do foreigners need to show a certain level of income or employment history in South Korea to qualify?
Foreigners must demonstrate stable income through recent tax returns, employment contracts, and proof of earnings, which can include both Korean and overseas income sources.
Banks typically require at least 6-12 months of documented income history, though some may accept shorter periods for borrowers with substantial assets or high-income positions. The lack of a Korean credit history makes income verification even more critical for foreign applicants.
Minimum income requirements vary by bank and loan amount, but most institutions expect borrowers to demonstrate monthly income at least 3-4 times the proposed mortgage payment. Self-employed foreigners face additional scrutiny and may need to provide 2-3 years of business financial statements.
Employment stability plays a crucial role, with banks preferring borrowers who have long-term contracts or permanent positions. Temporary workers or those with short-term employment contracts may find it difficult to secure mortgage approval regardless of income level.
Is it possible to get a mortgage in South Korea without permanent residency, or is a visa or residency status required?
Permanent residency is not strictly required for mortgage approval, but borrowers must hold a valid long-term visa such as F-2, F-4, or F-6 status.
Tourist visas or short-stay permits do not qualify for home loans, as banks require evidence of long-term commitment to residing in Korea. Work visas (E-series) may be acceptable depending on the contract duration and employer stability.
Non-resident foreigners face the most restrictive conditions, particularly after the August 2025 regulatory changes that require government permits for residential purchases in Seoul and metropolitan areas. These borrowers must also commit to residing in the property for at least two years.
Marriage visa holders (F-6) and permanent residents (F-5) typically receive the most favorable treatment from banks, often with terms approaching those offered to Korean citizens. Student visa holders generally cannot qualify for mortgages due to temporary status and limited income potential.
How many banks in South Korea currently have mortgage programs open to foreigners?
Multiple major banks in South Korea offer mortgage programs to foreigners, including KEB Hana Bank, Shinhan Bank, Woori Bank, KB Kookmin Bank, and several regional institutions.
The Korea Housing Finance Corporation (KHFC) also provides financing options for foreign buyers, often with more standardized terms and requirements. Regional banks such as Jeonbuk Bank participate in foreign lending but may have more limited programs or specific geographic focus areas.
However, availability and terms vary significantly between institutions, with some banks maintaining more restrictive policies or temporarily suspending foreign lending programs based on market conditions. Specialized branches in major cities like Seoul, Busan, and Incheon typically offer better service and understanding of foreign buyer needs.
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What documents do foreigners typically need to prepare for a mortgage application?
Foreign mortgage applicants must prepare comprehensive documentation including their Alien Registration Card (ARC) or valid visa documentation as primary identification.
- Valid passport and visa documentation or Alien Registration Card
- Property purchase contract with confirmed seal verification
- Proof of income from Korean and/or overseas sources
- Recent tax documents or income certificates (Korean or foreign)
- Employment contracts or business registration documents
- Bank statements showing financial history and deposit funds
- Marriage certificate if applicable for joint applications
- Receipt of earnest money or down payment deposit
Additional documentation may be required depending on the applicant's specific circumstances, such as divorce decrees, proof of child support, or business partnership agreements. All foreign documents must be properly translated and notarized according to Korean legal requirements.
Banks may also request additional financial statements, letters of employment, or guarantor information depending on the applicant's credit profile and loan amount requested.
Are there restrictions on transferring money from abroad to use as a down payment in South Korea?
Money transfers from abroad for real estate down payments are allowed but require proper documentation and approval processes before property closing.
Foreign buyers must provide detailed documentation about the overseas bank source and their visa status when remitting funds for property purchases. The Korean government requires transparency about fund origins to prevent money laundering and speculative investment.
A detailed financing plan must be reported to Korean authorities within 30 days of signing the property purchase contract, including information about down payment sources and mortgage arrangements. This requirement applies to all foreign property purchases regardless of amount.
Banks typically require proof that transferred funds come from legitimate sources such as savings accounts, investment sales, or employment income. Large cash transfers may trigger additional scrutiny and documentation requirements from both Korean and foreign banking authorities.
What is the average processing time for a foreigner's mortgage approval in South Korea?
Mortgage approval for foreign buyers typically takes several weeks to complete, significantly longer than the 1-2 week timeframe common for Korean citizens.
The extended processing time results from additional documentation verification, credit checks, and risk assessment procedures required for foreign applicants. Banks must verify overseas income sources, employment status, and legal residency documentation, which adds complexity to the approval process.
Applications involving non-resident foreigners or complex income structures may take even longer, particularly when government permits are required under the new regulations for Seoul and metropolitan area purchases. Rush processing may be available for additional fees but still requires minimum verification timeframes.
Applicants should plan for 4-8 weeks from initial application to final approval, with additional time needed for property registration and fund transfers. Starting the mortgage application process early in the property search can help avoid delays at closing.
Are there legal or tax obligations after purchase that foreigners need to be especially aware of?
Foreign property owners in South Korea face distinct tax obligations that differ significantly from those of Korean citizens, particularly regarding property taxes and capital gains.
Property tax rates for foreigners vary based on residency status and how long they hold the property, with non-residents typically facing higher rates than resident foreigners. Annual property taxes, local development taxes, and comprehensive real estate taxes may all apply depending on property value and location.
Capital gains taxes for foreign sellers can be substantial, especially for short-term holdings, with rates potentially reaching 50% or higher for properties held less than two years. Long-term foreign residents may qualify for reduced rates similar to Korean citizens under certain circumstances.
The new residency requirements for Seoul and metropolitan area purchases create additional compliance obligations, with penalties for failing to meet the two-year residency commitment. Foreign owners must also comply with annual reporting requirements to maintain their property ownership status.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Getting a mortgage as a foreigner in South Korea requires careful preparation and realistic expectations about stricter terms compared to local buyers.
The August 2025 regulatory changes have made non-resident foreign purchases more complex, particularly in Seoul and major metropolitan areas, requiring government permits and residency commitments that significantly impact investment strategies.
Sources
- Global Property Guide - South Korea Buying Guide
- Korea JoongAng Daily - Foreign Purchase Ban
- InvestAsian - South Korea Real Estate Guide
- BambooRoutes - South Korea Real Estate for Foreigners
- KED Global - Korean Regulations
- Korea Herald - Banking Article
- Standard Chartered Korea - Loan Details
- Ziptoss - Housing Loans for Foreigners