Everything About Korean Mortgage Calculation
A mortgage is the biggest financial decision for most households. Borrowing the same 300M KRW can produce total interest differences of tens of millions of won depending on the repayment method, rate, and term. This calculator instantly compares the three standard repayment methods used by Korean banks: equal payment (amortized), equal principal, and interest-only bullet repayment.
Equal payment (amortization) keeps the monthly amount constant until maturity, making it the most popular choice for easy budgeting — early payments are mostly interest, shifting toward principal over time. Equal principal repays a fixed amount of principal each month plus interest on the remaining balance: the first payment is the highest, but payments shrink monthly and total interest is the lowest of the three. Bullet repayment pays only interest each month with the full principal due at maturity — the lightest monthly burden but the highest total interest.
For example, borrowing 300M KRW at 4% over 30 years: equal payment costs about 1.43M KRW/month (total interest ~216M), equal principal starts at about 1.83M KRW and decreases (total interest ~181M), and bullet costs 1M KRW/month in interest plus 300M at maturity (total interest 360M). The detailed first-12-months schedule plus yearly summaries show exactly how the balance declines.
Pro tip: the surest ways to cut total interest are a shorter term and early repayment. Choosing 20 years instead of 30 raises the monthly payment but slashes total interest. If your income will grow, equal principal reduces the balance fastest; if early cash flow is tight, equal payment is safer. Korean DSR regulation caps annual repayments at 40% of income, so check that your calculated monthly payment stays below roughly 30% of monthly income.