Equal installments · equal principal · bullet — with yearly schedule
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How it works
Equal installments: the same payment every month; most Korean mortgages use this.
Equal principal: higher payments at first, but less total interest.
Bullet: interest only each month and the whole principal at the end — common for jeonse loans and credit lines.
FAQ
What is the monthly payment on ₩100M over 30 years at 4.5%?
About ₩506,700 a month with equal installments.
Worked example
Example: a ₩100 million loan at 4.5% over 30 years (360 months) with equal installments costs ₩506,685 a month. Total interest is about ₩82.4 million, so you repay about ₩182.4 million. Over 10 years at 4%, the payment rises to about ₩1,012,451 but total interest drops to about ₩21.5 million.
Effect of one percentage point: the same ₩100 million over 10 years with equal installments costs about ₩1,012,451 a month at 4% and about ₩1,060,655 at 5%. Total interest rises from about ₩21.5 million to about ₩27.3 million — nearly ₩5.8 million more for a single point. Over 30 years at 4% the payment would be about ₩477,415 with about ₩71.9 million of interest.
Common mistakes
Longer terms lower the monthly payment but greatly increase total interest.
Variable-rate loans (변동금리) are recalculated whenever the rate changes.
Prepayment fees, stamp duty and guarantee fees are not included.
Grace periods (거치기간) mean interest-only payments at first and higher payments later.
Loan rates are annual; the monthly interest uses the annual rate divided by 12. A 4% loan therefore charges about 0.333% of the remaining balance each month, so early payments carry a larger share of interest than later ones.