Guide · as of 2026-08-09T00:00:00.000Z
Korean housing rents through two systems: jeonse (전세) — a large refundable deposit, typically 50–80% of the property’s value, with no monthly rent — and wolse (월세) — a smaller deposit plus monthly rent. The legal bridge between them is the conversion rate cap: when converting deposit to monthly rent within an existing lease, the annualized rate may not exceed the Bank of Korea base rate plus 2 percentage points, or 10%, whichever is lower (Housing Lease Protection Act, Article 7-2; Enforcement Decree, Article 9). With the base rate at 2.75% (raised from 2.50% on 2026-07-16), the current cap is 4.75%: converting ₩100 million of deposit into rent may add at most ₩395,833 per month (100,000,000 × 4.75% ÷ 12).
How each system works
전세. The tenant lends the landlord the deposit for the lease term (2 years standard, renewable once by right under the 2020 lease law for a total of 4, with renewal increases capped at 5%). No monthly rent; the tenant pays utilities and 관리비. The deposit returns in full at move-out — which is why deposit protection (확정일자, guarantee insurance) is the core topic of jeonse, covered in the deposit safety guide. Jeonse exists because it functions as landlord financing; its share of the market moves with interest rates and house price expectations.
월세 / 반전세. Deposit commonly 10–24 months of rent for ordinary wolse; 반전세 (“half-jeonse”) describes a large deposit with a reduced monthly rent. Listings quote as 보증금/월세, e.g. 1000/65 = ₩10 million deposit, ₩650,000 monthly.
The conversion math
The statutory cap (currently 4.75%) binds only conversions within an existing contract; new contracts price freely at market conversion rates, which run higher — the Korea Real Estate Board publishes measured 전월세전환율 by region, historically in the 5–6% range for Seoul (unverified: latest published Seoul figure). The direction of the arithmetic: at a 5% market conversion rate, ₩100 million of deposit ≈ ₩416,667/month of rent. The calculator at /tools/jeonse-wolse applies both the statutory cap and a user-set market rate.
What the 2026 market prefers
The structural shift since the 2022–2023 jeonse fraud wave and deposit-return crisis is toward monthly rent: wolse’s share of new lease contracts nationwide passed half of all reported lease transactions in 2023 and has stayed there (unverified: latest MOLIT share figure), with the shift steepest in the villa/officetel segment where guarantee insurance became hard to obtain. Landlords of small units increasingly prefer wolse income; jeonse remains dominant in the apartment segment, where deposits are insurable and tenants can borrow against jeonse loan products. Rising base rates in 2026 push the same direction, since jeonse deposits are worth more to tenants as bank deposits and cost more to fund with loans.
Broker fees (중개보수) for leases
Statutory caps, as published by Seoul (identical bands nationally under the 공인중개사법 시행규칙; local ordinance can only lower them). The transaction amount for a lease is 보증금 + (월세 × 100); if that sum is under ₩50 million, it is recalculated as 보증금 + (월세 × 70).
| Transaction amount | Cap rate | Ceiling |
|---|---|---|
| under ₩50m | 0.5% | ₩200,000 |
| ₩50m–100m | 0.4% | ₩300,000 |
| ₩100m–600m | 0.3% | — |
| ₩600m–1.2bn | 0.4% | — |
| ₩1.2bn–1.5bn | 0.5% | — |
| ₩1.5bn+ | 0.6% | — |
These are ceilings, negotiable downward, paid by each side to the broker. A ₩300 million jeonse: max ₩900,000. A 1000/65 wolse: transaction amount ₩75 million (₩10m + ₩650,000 × 100), max fee ₩300,000 (0.4% = ₩300,000, which also equals the band’s ceiling). VAT of 10% applies on top of the fee (unverified: VAT treatment for simplified-taxpayer brokers).