Does giving up the deposit end a Korean presale contract?
A falling market or an approaching installment can make cancellation look attractive.
However, the deposit alone may not cover the contractual penalty, reimbursed developer-paid interest, bank repayment fees or separate option contracts.
At the same time, treating every paid installment as a loss overstates the cost when principal is refundable.
This calculator compares cancellation, resale or title transfer, and completion followed by holding for an original subscriber to a Korean housing supply contract.
Use it before giving cancellation notice, with the supply contract and loan statement available.
It separates modeled economic loss from the additional cash needed and checks whether the conditions you entered allow a route to participate in the lowest-loss comparison.
Scope: the original subscriber
This model does not include a premium you previously paid to buy someone else’s presale rights.
Resale acquisitions, gifts, land-lease housing, special public repurchase arrangements and developer-default compensation require a separate analysis.
Korean rules for 2026 apply; the tool does not establish a right to cancel, approve a transfer, assess tax or predict a court outcome.
What the three routes measure
Cancel
Add the contract penalty, bank interest and confirmed settlement charges, then deduct refund interest receivable.
If the loss exceeds your equity already paid, the settlement requires an additional payment.
Resell or transfer
Compare the premium or discount against capital gains tax, brokerage, transfer charges and applicable loan fees.
Restriction status, transaction consent and bank settlement terms determine eligibility for comparison.
Complete and hold
Compare the price and acquisition and carrying costs with the expected net value on exit.
Also prepare the equity needed at completion and the interest and other costs over the holding period.
Only routes with the required confirmations and enough entered cash are included in the lowest-loss result.
Unconfirmed routes remain visible as conditional estimates, with their exclusion reasons.
Ties at the whole-won level are displayed together; when no route qualifies, the calculator does not name a lowest-loss route.
This is a comparison under your assumptions, not an investment recommendation.
Enter deposits, installments and debt without double counting
Equity already paid is different from available cash
Contract price means the full supply price.
Deposit and interim installments are the amounts actually paid, including money the bank paid directly to the developer.
The outstanding interim loan is already inside those installments, so subtract it once when calculating equity paid.
A KRW 50,000,000 deposit plus KRW 100,000,000 of installments financed by a KRW 100,000,000 loan leaves KRW 50,000,000 of your own equity paid.
Available cash is money you can use from today, such as current savings or separately confirmed funding.
Do not add the original deposit or an expected refund again.
The installment count checks payment consistency; it does not establish whether performance has legally commenced or whether cancellation is permitted.
Use at least one installment when interim payments exist, and zero when none have been paid.
Total paid amounts cannot exceed the contract price, and the interim loan cannot exceed the paid interim installments in this model.
Check for option payments, settled interest or unrelated loans if those validations fail.
Amounts are whole KRW; rates accept decimals from 0% to 100%.
Money inputs are technically limited to KRW 100,000,000,000, periods to 600 months, refund waiting to 3,650 days and installment count to 20.
These are tool limits, not legal thresholds.
A 10% penalty is an example, not a universal statutory rate
Start with the base amount and wording in the actual contract.
A percentage of the full supply price, a sum linked to the deposit and a negotiated fixed amount are different inputs.
Choose price times the contractual percentage, or enter a fixed amount directly.
The initial 10% is illustrative, and the paid deposit is not added again when the penalty already represents that amount.
A written clause still needs legal review
Civil Act Article 398 addresses agreed damages and the possible reduction of an unreasonably excessive amount.
Article 8 of the Act on the Regulation of Terms and Conditions addresses unfairly burdensome damages clauses.
The mere presence of a clause does not establish that every charge is enforceable.
This calculator does not choose a reduction rate or decide a dispute; leave the route unconfirmed while material terms remain contested.
Civil Act Article 565 addresses earnest-money cancellation subject to other agreements and commencement of performance.
Do not assume that paying or forfeiting a deposit always permits unilateral cancellation of a supply contract after interim installments.
Select the cancellation confirmation only after verifying the basis and settlement terms.
Use the optional note for a clause reference and confirmation date so those details accompany the printed report.
Refund interest and bank interest flow in opposite directions
Interest paid to the bank adds to loss
While the refund is pending, an outstanding loan may continue to accrue interest.
The estimate is principal × annual rate / 100 × waiting days / 365, rounded to the nearest won.
It assumes simple interest and an unchanged balance and rate; the bank’s actual day-count convention and settlement quote may differ.
Refund interest receivable reduces loss
Civil Act Article 548 addresses restitution and interest on money to be returned from its receipt date.
Interest payable to you increases your recovery, so it is subtracted from the loss.
Enter a confirmed payment-by-payment total because installments have different receipt dates.
The calculator does not impose a single interest rate or apply the same elapsed time to every payment.
An interest-free installment offer may still contain a clause requiring reimbursement of interest paid by the developer if the contract ends.
Enter confirmed reimbursement in other cancellation costs and future bank interest in the waiting-period calculation.
This avoids counting the same period twice.
Separate balcony expansion or paid-option penalties belong in additional settlement costs only after reviewing the relevant option contract.
Verify resale restrictions and the bank’s loan decision
Housing Act Article 64 covers transfers of the right to occupy a supplied home as well as the home itself.
A title change or gift does not automatically escape those restrictions.
Article 73 of its Enforcement Decree refers to Annex 3 for restriction periods and sets out exceptions and consent procedures.
Check the offering notice, region, land type, applicable amendments and the authority’s interpretation before entering the remaining period.
- Ordinary resale is included only when expiry or non-application is verified and the remaining period is zero months.
- An unconfirmed status remains excluded even with zero months entered.
- A remaining restriction excludes ordinary resale.
Use the exception option only when the consent required for this specific transaction has actually been obtained.
- If debt remains, verify either approval for the buyer to assume it or simultaneous repayment from the transaction proceeds.
With approved assumption, the debt transfers to the buyer; it is not added again as an economic loss.
With repayment, proceeds are used to settle the loan and the entered repayment fee applies.
An unknown bank decision uses a conservative repayment-fee estimate but keeps resale out of the lowest-loss candidates.
When principal is zero, a bank assumption decision is unnecessary and the resale loan fee is excluded.
Formulas for loss and cash preparation
Cancellation
Cancellation loss = contractual penalty + waiting-period bank interest + repayment fee + other settlement charges − refund interest receivable.
Net settlement cash = equity already paid − cancellation loss.
Positive settlement cash is money recovered; negative cash means an additional payment.
Resale
Resale loss = −premium + capital gains and local income tax + brokerage + title-transfer fee + other costs + applicable loan repayment fee.
A premium of KRW −30,000,000 therefore adds KRW 30,000,000 of loss.
A positive premium exceeding the expenses produces a negative loss, meaning a gain.
Net settlement cash again equals equity paid minus the modeled loss.
Holding and completion
Holding loss = contract price + acquisition costs + holding-loan interest + other period costs − net exit value.
Net exit value = expected end value − exit taxes and selling costs.
Holding interest = total completion loan × annual rate / 100 × holding months / 12.
Completion equity needed = unpaid contract price + outstanding interim loan − total replacement completion loan + acquisition costs, floored at zero.
The completion loan is the full loan after refinancing, including the amount used to replace the interim loan.
Entering only the borrowing increase would overstate the required equity.
Holding assumes a constant post-completion balance; pre-completion interest, refinancing fees and carrying taxes not entered elsewhere belong in other period costs.
Cash preparation for cancellation and resale is only the net deficit after simultaneous settlement.
A bank may require repayment before the developer refunds you, creating a larger bridge-funding need that this number does not cover.
Holding cash preparation conservatively includes completion equity plus all modeled interest and other period costs before exit proceeds arrive.
The routes have different time horizons; discounting, rental income and the benefit of living in the home are excluded.
Worked example: a KRW 500,000,000 supply contract
Assume a KRW 50,000,000 deposit, KRW 100,000,000 of interim payments and a KRW 100,000,000 interim loan.
Equity already paid is KRW 50,000,000, and available additional cash is KRW 200,000,000.
For this example, all relevant cancellation, resale, bank and completion conditions have been verified.
The initial calculator deliberately starts with unconfirmed conditions instead.
Illustrative modeled losses, settlement cash and funding requirements in KRW for a 500 million won supply contract| Route | Loss (KRW) | Settlement cash | Cash to prepare |
|---|
| Cancel | 51,500,000 | −1,500,000 | 1,500,000 |
| ★ Resell | 32,300,000 | 17,700,000 | 0 |
| Hold | 35,000,000 | Valuation only | 180,000,000 |
How the example amounts are built
Cancellation uses a 10% penalty of KRW 50,000,000, a KRW 500,000 repayment fee and KRW 1,000,000 of other costs, with no waiting days or refund interest.
Resale uses a KRW 30,000,000 discount, KRW 2,000,000 brokerage and KRW 300,000 transfer costs, with approved loan assumption and zero tax as an illustrative input.
This does not mean every discounted resale has zero tax.
Holding uses an end value of KRW 500,000,000, exit costs of KRW 5,000,000 and acquisition costs of KRW 15,000,000.
A total replacement completion loan of KRW 300,000,000 at 5% for 12 months produces KRW 15,000,000 of interest.
Completion equity is KRW 165,000,000; adding holding interest gives KRW 180,000,000 of cash preparation.
The modeled loss is KRW 35,000,000, including the exit costs already deducted from future value.
From calculation to a written settlement
- Gather the supply and option contracts, payment ledger and outstanding loan statement.
- Request the developer’s penalty basis, refund date, refund interest and interest-reimbursement breakdown.
- Verify transfer restrictions and bank assumption or repayment terms, and obtain a case-specific tax estimate.
- Enter a conservative end value and the full replacement completion loan, with acquisition and exit costs separated.
- Calculate and read loss, cash requirements and exclusion reasons together.
Correct any highlighted inconsistencies.
- Review the input record, print or save the report as PDF, and use it to request written terms from the parties.
Editing an input clears the previous report so you can recalculate using the revised assumptions.
You can update only the affected quote or value instead of resetting everything.
Calculator inputs are held in this page’s memory; the printed report includes your optional contract note.
Remove unnecessary identifying details before sharing a printout.
Situations that change the decision
Penalty larger than the deposit paid
If only part of the deposit was paid but the verified penalty uses a larger contractual base, you may owe more after cancellation.
The calculator uses the full entered penalty and does not cap loss at the money already paid.
Resale looks cheaper but remains restricted
A smaller discount than the cancellation penalty does not make a transfer permissible.
A restricted route stays out of the comparison unless the necessary exception consent for the transaction is actually verified.
A hoped-for price or possible exception is insufficient.
Holding looks attractive but lacks funding
A recovery in the assumed future price may lower the modeled holding loss.
However, an unapproved replacement loan or insufficient completion equity can prevent completion.
Any positive funding gap excludes that route from the lowest-loss candidates.
Refund delays and interest exposure
A KRW 100,000,000 loan at 5% over 365 waiting days produces KRW 5,000,000 of simple interest.
Refund interest can offset economic cost while leaving a timing mismatch between bank repayment and receipt of funds.
Confirm dates as well as amounts in writing.
Frequently asked questions
Is the penalty always 10% of the supply price?
No.
Check the base amount, contract wording, settlement agreement and enforceability.
The initial 10% is only an example.
Can I abandon the deposit after interim payments?
Commencement of performance, supply-contract cancellation grounds and other agreements need review.
A calculated amount does not establish a right to cancel.
Are refunded installments part of the loss?
Refunded principal is recovery.
Loan-funded amounts are settled through repayment or assumption, so the principal is not added to economic loss again.
Does calling it a title change avoid resale restrictions?
The Housing Act covers a broad range of changes in rights, including sales and gifts.
Check the actual transaction and any required consent; terminology alone does not create an exception.
Does zero remaining restriction time make resale eligible?
You must also confirm expiry or non-application.
If a loan exists, confirm bank assumption or simultaneous repayment terms.
Why are acquisition and capital gains taxes entered manually?
Accurate tax treatment depends on the acquisition date, holding period, housing count, deductible costs and other transactions.
Enter a case-specific estimate, including local income tax where relevant, from a tax calculator or professional review.
Is a negative holding loss a guaranteed gain?
No.
It reflects assumed future value and costs, with unrealized price changes.
Actual sale value, tax, interest and the value of occupancy can differ.
Is the displayed cash preparation enough to repay the bank?
Cancellation and resale show a net deficit under simultaneous settlement.
If bank repayment precedes the refund, additional bridge funding for the principal may be necessary.
Official sources and effective dates
Korean rules for 2026; verified September 6, 2026 (2026-09-06).
The National Law Information OPEN API returned current status for the statutes below; article text and effective dates were checked directly.
- Civil Act, Articles 398, 548, 551 and 565 — effective 2026-03-17, MST 284415
- Housing Act, Article 64 — effective 2026-08-04, MST 283191
- Enforcement Decree of the Housing Act, Article 73 — effective 2026-08-04, MST 288361
- Act on the Regulation of Terms and Conditions, Article 8 — effective 2024-08-07, MST 260021
The Civil Act text is effective 2026-03-17 (MST 284415); the Housing Act and its Enforcement Decree are effective 2026-08-04 (MST 283191 and 288361).
The Terms and Conditions Act text is effective 2024-08-07 (MST 260021).
Civil Act Articles 398, 548, 551 and 565, Housing Act Article 64, Decree Article 73 and Terms and Conditions Act Article 8 provide the legal context.
The Fair Trade Commission’s July 1, 2015 explanation of the standard supply-contract revision provides historical context on refund-interest treatment before deduction of the penalty.
It is not proof of one current penalty rate or interest rate for every contract.
Regional restriction values in Annex 3 are not embedded in this calculator; recheck the offering notice, actual agreement, consent and transitional amendment provisions.
Use the comparison to confirm real settlement terms
Bring the supply contract, receipts, developer refund statement, bank quote and tax estimate together.
Recalculate with verified amounts and request written agreement on both payment amounts and dates before cancellation notice or a resale commitment.