About Jeonse and Rent Conversion
Jeonse is a uniquely Korean rental system where tenants pay a large lump-sum deposit — typically 50–80% of the property's market value — instead of monthly rent. When converting to monthly rent, the formula is: Monthly rent = (Jeonse − Security deposit) × Rate% ÷ 100 ÷ 12. To convert back, the formula is: Jeonse = Security deposit + Monthly rent × 12 ÷ (Rate% ÷ 100).
The legal conversion rate in Korea is set by the Housing Lease Protection Act at the Bank of Korea base rate + 2%, approximately 5.0% in 2024. Landlords are prohibited from applying rates exceeding this legal cap. Amounts entered here are in units of (10,000 KRW). The result is a reference figure — actual rental agreements are subject to negotiation between parties.
Frequently Asked Questions
It depends on your available capital and the market. If bank loan rates are lower than the conversion rate, borrowing to pay jeonse may cost less than paying monthly rent. When loan rates exceed the conversion rate, monthly rent may be cheaper overall.
The landlord must return the full deposit at lease expiration. Korean law protects tenants through the Housing Lease Protection Act, including priority in recovery if the property is sold or foreclosed, provided the lease is properly registered.