Could qualifying mortgage interest be missing from your deductions?
Korea’s long-term mortgage-interest income deduction reduces employment income by qualifying interest on a loan used to acquire a home.
It does not deduct the entire monthly payment: interest, household facts, property value, borrowing dates and repayment arrangements all matter.
Two borrowers paying the same KRW 15 million in interest may receive different deductions because of the fixed-rate and non-deferred classifications.
This is a Korea-specific calculator for the 2026 tax year and one mortgage, using KRW.
It helps employed home buyers and relatives reviewing a parent’s loan identify the documents and conditions to verify.
It does not apply another country’s mortgage rules, claim a deduction or submit a tax return on your behalf.
What this review calculates
Eligibility and deduction amount
Check claimant status, year-end household homes, assessed value and registration / borrowing dates.
Classify fixed-rate and non-deferred repayment, then identify the KRW 6 million, 8 million, 18 million or 20 million cap.
Apply verified other housing deductions and the employment-income limit to the mortgage deduction.
Evidence and next steps
Distinguish a confirmed failed requirement from an unverified condition.
Review refinancing principal outside the old balance, the three-month deadline and the statutory annual principal minimum.
Save or print inputs and results to reconcile the same assumptions with the bank or employer.
The supported scope is ordinary acquisition and one qualifying refinance.
Assumed debt, pre-completion or association rights, extension exceptions, repeated refinancing and repayment-method changes during the year require separate review.
Original borrowing before 2015 is held for transitional review rather than declared ineligible.
This is not a complete year-end settlement or a final assessment of multiple comprehensive income sources.
Claimant, household status and year-end homes
- The claimant needs non-daily employment income and Korean tax residency.
Business-interest expense deductions are a separate issue.
- Count homes owned by the whole household, including the spouse even when living separately.
The ordinary mortgage test uses zero or one home on December 31, not only the applicant’s own titles.
- A household head need not actually occupy the home.
A household member must live there and the head must not claim the relevant rental-loan, mortgage-interest or subscription-savings deductions.
- Certain registered foreign residents may qualify.
Confirm registration / residency and that the spouse and relevant household members have not claimed housing deductions before choosing that status.
- The borrower must own the mortgaged home.
Joint owners use the whole-home value and only their own qualifying debt / interest; paying a parent’s loan does not by itself satisfy the ownership condition.
Residential officetel units are excluded from this long-term mortgage-interest deduction.
Their recognition under certain rental-loan or rent-credit rules does not establish eligibility here.
KRW 600 million and homes acquired before 2024
Use the official assessed value at acquisition rather than today’s market value or the contract purchase price.
If the loan preceded publication, check the first official value published afterward.
Homes acquired from 2024 can use the KRW 600 million ceiling; earlier acquisitions retain the applicable earlier property conditions.
A recent refinancing date does not move an older acquisition to the new ceiling.
Supported acquisition and original borrowing dates and assessed-value ceilings| Acquisition / original borrowing | Value ceiling |
|---|
| Acquired from 2024-01-01 | KRW 600,000,000 |
| Earlier acquisition; original borrowing from 2019 | KRW 500,000,000 |
| Earlier acquisition; original borrowing in 2015–2018 | KRW 400,000,000 |
For example, a December 2023 acquisition with an ordinary January 2024 loan uses KRW 500 million here.
Income Tax Act Supplement 19933 Article 16 preserves earlier property conditions for pre-2024 acquisitions.
The raised deduction caps can apply to interest paid from 2024, so the property-price date and the interest-payment date must be distinguished.
Three calendar months and the 10 /15-year terms
Three months is not 90 days
An ordinary loan must be borrowed within three months of ownership transfer or preservation registration.
The calculator adds calendar months: January 31 plus three months is April 30.
Borrowing before registration is held for review of exceptions such as immediate ownership transfer, rather than automatically accepted.
Remaining term versus total term
Compare original borrowing with the final maturity.
A 2024-03-01 loan maturing 2039-03-01 reaches 15 years; one day earlier can change the band.
A refinance must reach 15 years measured from original borrowing, not merely from the refinance date.
Contract maturity, actual early repayment and special term extensions differ.
Review the certificate and applicable provision when early settlement changes conditions or an extension needs a new assessed-value test.
An ordinary maturity comparison does not approve such exceptions.
The 70% fixed-rate and annual principal tests
Fixed principal share and reset interval
Interest on at least 70% of the principal must stay fixed throughout the repayment term, including arrangements reset at intervals of at least 5 years.
An unchanged current rate alone is insufficient.
Enter 0 for the reset interval only when the contract remains fixed through maturity.
This year and the whole repayment schedule
Non-deferred amortisation allows an interest-only period of no more than 1 year.
From the tax year grace ends to the tax year of maturity, every year must repay at least the statutory principal minimum.
A product described as equal-principal or equal-payment does not establish this by name alone.
A partial repayment year counts as a full year in the denominator, while repayment months in the tax year prorate the minimum.
Annual minimum = principal × 70% ÷ repayment years × repayment months /12
KRW 300 million over 15 years with 12 repayment months requires KRW 14 million for that year.
The calculator rounds a fractional-won minimum upward before comparing actual principal repayments.
After refinancing, this principal test uses the current contract duration; confirm every-year compliance with the bank schedule separately.
2026 caps and other housing deductions
The separate KRW 25 million aggregate limit
Restriction of Special Taxation Act Article 132-2 limits the combined covered housing, subscription, card-use, employee-share and other specified deductions to KRW 25,000,000.
Personal, pension and health-insurance deductions are excluded from this aggregate test.
Enter other income deductions before this aggregate adjustment, then enter only their covered subset in the separate field.
Other housing above is added automatically; do not enter it again in the subset.
For example, KRW 10 million of covered card-use and employee-share deductions plus KRW 20 million mortgage interest creates KRW 5 million of excess added back to the tax base, leaving KRW 15 million of net added deduction.
The calculator adjusts excess before and after this mortgage deduction separately, including when the other covered deductions already exceeded the limit.
Annual shared housing deduction caps by term and repayment classifications| Repayment term | Classification | Annual cap |
|---|
| 15 years or more | Fixed AND non-deferred | KRW 20,000,000 |
| 15 years or more | Fixed OR non-deferred | KRW 18,000,000 |
| 15 years or more | Neither | KRW 8,000,000 |
| 10 to less than 15 years | Fixed OR non-deferred | KRW 6,000,000 |
An ordinary loan below 10 years, or a 10-to-15-year ordinary loan with neither classification, does not qualify under these bands.
Subtract already verified rental-loan and housing-savings deductions from the shared cap.
Those two deductions also have their own KRW 4 million combined ceiling; enter actual deductions, not gross payments or loan instalments.
Remaining cap = statutory shared cap − verified other housing deductions.
The mortgage deduction is the smallest of eligible interest, remaining cap and employment income.
A KRW 20 million cap with KRW 1.2 million of other housing deductions leaves KRW 18.8 million against KRW 25 million of interest.
Check homelessness, income and household conditions for the other deductions separately.
How to use the calculator
- Prepare the bank interest certificate, property registry and assessed value at acquisition.
An amount in the simplified year-end service does not automatically establish eligibility.
- Enter year-end household status, homes including the spouse, and the borrower-owner relationship.
Household members additionally verify actual residence and the head’s deduction claims.
- Enter acquisition, registration, original borrowing and final maturity dates.
Replacing original borrowing with refinancing changes the historical price and term tests.
- Enter fixed principal share, reset interval, grace, actual principal, repayment months and the bank-confirmed schedule.
Paying monthly interest alone does not establish non-deferred amortisation.
- Enter eligible annual interest, verified other housing deductions, non-taxable-pay-excluded salary and other income deductions.
Do not deduct the same housing amounts twice in the other-deductions field.
- Resolve review items, save a TXT report or print it, and verify documents, 2026 amounts and scope.
Submit the actual documents to the employer; the report does not file a claim.
Worked examples: deduction versus tax reduction
Fixed + amortising for 15 years: KRW 3,960,000
The fictional example acquires a home in 2024 at an assessed KRW 600 million, with KRW 300 million principal, 100% fixed through maturity, zero grace and a 15-year term.
KRW 15 million principal repayment exceeds the KRW 14 million annual minimum, and the whole schedule is confirmed.
KRW 15 million interest fits the KRW 20 million cap.
Salary of KRW 100 million less the KRW 14.75 million employment allowance and KRW 5.25 million other deductions produces tax bases of KRW 80 million before and KRW 65 million after.
National tax falls from KRW 13.44 million to KRW 9.84 million, saving KRW 3.6 million plus KRW 360,000 local tax: KRW 3.96 million combined.
Variable + grace for 15 years: KRW 2,112,000
Keep the same home, salary and interest but use zero fixed share and 24 months of grace.
Neither classification applies, so the ordinary 15-year cap deducts KRW 8 million and the tax base falls from KRW 80 million to KRW 72 million.
National tax reduces by KRW 1.92 million and local tax by KRW 192,000, totalling KRW 2.112 million.
Comparing only home value or interest would miss this difference.
Crossing a bracket: KRW 1,254,000
A KRW 20 million tax base reduced by a KRW 10 million deduction falls to KRW 10 million.
National tax falls from KRW 1.74 million to KRW 600,000, a KRW 1.14 million reduction; estimated local tax adds KRW 114,000 for KRW 1,254,000 combined.
Multiplying the entire deduction by the initial 15% marginal rate would ignore the bracket crossing.
The calculator compares the 6%, 15%, 24%, 35%, 38%, 40%, 42% and 45% progressive schedule and caps the employment allowance at KRW 20 million.
Refinancing decisions and practical scenarios
Before refinancing for a lower rate
Check original eligibility, the same-home mortgage, direct or immediate repayment and 15 years from original borrowing.
Refinancing KRW 200 million of old debt with KRW 250 million creates KRW 50 million of additional principal whose interest is excluded.
Ask the bank to allocate qualifying annual interest; this calculator does not invent a proportional allocation.
Helping a parent review year-end deductions
Find assessed value at acquisition and the original borrowing date rather than today’s price.
Pre-2015 borrowing needs historical limits, size conditions and transitional review; a pending result does not mean the deduction is unavailable.
Take the report and certificates to the bank or employer to resolve the missing facts.
Before copying this amount into a broader income-tax calculator, check that its tax year and housing caps match.
If the transferred amount already includes the KRW 25 million aggregate adjustment, do not deduct the same excess again.
For omitted earlier-year deductions, recheck that year’s law and amended-claim deadline rather than applying 2026 rules retrospectively.
Frequently asked questions
Does a purchase price above KRW 600 million rule out the deduction?
Purchase price and official assessed value at acquisition are different.
Compare the appropriate official value, or the first published value if borrowed before publication.
For joint ownership, do not divide the whole-home assessed value by your ownership share.
Is there a KRW 70 million salary ceiling?
Do not import the salary gates for housing subscription savings or rent tax credits into this mortgage-interest deduction.
First check employment income, tax residency, household, property and loan conditions.
Salary here estimates employment income and the tax reduction; exclude non-taxable pay.
Must the household head live in the mortgaged home?
A household head can qualify without actually living there.
A household member must live in the home and the head must not claim the relevant housing deductions.
A child paying interest on a parent-owned home does not automatically satisfy the borrower-owner requirement.
What if the household briefly owned two homes during the year?
For the ordinary home-interest deduction, check all household homes at the end of the tax year.
Two homes during the year and one at year end can still warrant review of the remaining conditions.
Separate rules for holding multiple pre-completion rights must not be replaced by this ordinary home-count test.
Does a product labelled fixed-rate automatically get the KRW 20 million cap?
Check the 70% principal share and a fixed rate through maturity or reset intervals of at least 5 years.
Also check grace and the statutory every-year principal schedule.
For 15 years or more, both fixed-rate and non-deferred conditions give KRW 20 million; only one gives KRW 18 million.
Does refinancing with extra borrowing make all new interest deductible?
The recognised refinancing amount is limited to the previous mortgage balance.
Exclude interest on additional principal and use bank-allocated eligible annual interest.
Also check 15 years from original borrowing to final maturity, direct or immediate repayment, and security over the same home.
Can I apply only the current caps to a mortgage borrowed before 2012?
Not always.
Income Tax Act Supplement 19933 Article 16 preserves earlier rules when current caps disadvantage certain pre-2012 borrowers.
This calculator holds original borrowing before 2015 for review of historical caps, national housing-size conditions, transitional provisions and bank certificates.
Does the KRW 3.96 million example mean I receive that refund?
KRW 3.96 million is the fictional example’s combined national and local tax reduction before credits, relief and prepaid tax.
The actual refund depends on those items.
Obtain a bank certificate if absent from the simplified service, submit it to your employer and ask NTS about amended claims and deadlines for any earlier omitted year.
Official evidence, update dates and follow-up
The separate aggregate limit is verified against Restriction of Special Taxation Act Article 132-2, effective 2026-09-18, in current OPEN API MST 284389.
Aggregate excess is added back to the tax base before and after this deduction to estimate the tax difference.
Verified on 2026-10-07 through the official National Law Information OPEN API.
The current Income Tax Act edition is effective 2026-07-01; the inspected Articles 47,52 and 55 are effective 2026-01-01.
Enforcement Decree Article 112 uses the 2026-10-01 edition.
Article 52(5) provides base conditions and the KRW 8 million cap, Article 52(6) sets special caps, and Decree 112 defines household, borrowing, fixed-rate, non-deferred and refinancing conditions.
Supplement 19933 Article 16 and Supplement 16104 Article 5 determine transitional application dates.
Figures are whole-won planning estimates; local tax reduction assumes 10% of the national reduction.
Tax credits, relief, prepaid tax, filing-form rounding and other comprehensive income are excluded.
Recheck property thresholds, caps, fixed / amortising definitions, refinancing, foreign-resident conditions and transitional provisions after legal changes.
Reconcile the result with bank evidence and confirm actual document submission separately.
Review the rest of your year-end settlement
After resolving mortgage eligibility and preparing evidence, review the broader year-end settlement.
Subscription savings and rent credits need their own eligibility and overlap checks.