Should I Increase My Monthly Housing Subscription Savings to 250,000 Won?

Starting November 1, 2024, the recognized monthly contribution limit for housing subscription savings will increase from 100,000 won to 250,000 won.

Starting November 1, 2024, the recognized monthly contribution limit for housing subscription savings will increase from 100,000 won to 250,000 won. This change benefits those applying for public housing, allowing them to save faster. However, not everyone needs to raise their monthly contributions. In this post, we will explore the details of the change and whether increasing the monthly contribution is beneficial for everyone.

From November 1, 2024, the recognized contribution limit for housing subscription savings will rise from 100,000 won to 250,000 won. This adjustment allows applicants for public housing to meet eligibility requirements faster, with the possibility of saving 1.5 million won in just five years. While this change is advantageous, it doesn’t mean that all applicants need to increase their monthly savings to 250,000 won.

Is it necessary to raise your contribution?

Currently, housing subscription account holders can contribute between 20,000 and 500,000 won monthly. However, only up to 100,000 won has been recognized for public housing lottery selections. Those who wanted to win public housing had to save diligently for over 12 years. The new limit offers a faster route, but the increase is particularly beneficial for certain applicants.

Experts suggest that if your savings already exceed 10 million won, increasing the monthly contribution to 250,000 won may be advantageous. However, if you’ve only been saving 100,000 won per month, it may still be challenging to compete with those who have saved for longer. 

Consistency over large sums

More important than increasing the monthly contribution is maintaining consistent savings over time. Special categories, such as multi-child or newlywed benefits, only require six months of contributions and meeting the number of deposit requirements. For first-time buyers, utilizing the prepayment system (600,000 won lump sum) can also help you qualify without needing to save regularly every month.

For those using the prepayment system, the Ministry of Land, Infrastructure, and Transport has allowed an increase in monthly contributions. You can now visit your bank and adjust the contribution amount.

Unified housing subscription accounts

Additionally, starting in November, subscription accounts like savings, deposits, and installment savings can be consolidated into the housing subscription savings account. This allows applicants to apply for both private and public housing under a single account. However, new contributions will only count from the time of conversion, and those who have already applied for housing under the older accounts must wait for the results before switching.

The government will run this account conversion system for one year, with the possibility of extending it depending on demand.

The increase in the recognized monthly contribution limit for housing subscription accounts offers a faster path to meeting eligibility for public housing. However, raising your monthly contribution isn’t always necessary, especially for those who have already been consistently saving. Whether through regular monthly contributions or utilizing prepayment options, it’s essential to choose the strategy that works best for your financial situation. Use this opportunity wisely to enhance your chances of securing a home.