How to Spot an Underwater Jeonse (Jeonse-to-Value & Market Price)
If senior mortgages plus your deposit exceed the market price, it's underwater (kkangtong). A jeonse-to-value ratio over 80% or a new villa means you won't recover your deposit at auction.
💡 An 80% jeonse-to-value ratio isn't a safety line — it's a warning line. If home prices drop, even 80% turns underwater in an instant.
What the ads say
If the jeonse price is close to the sale price, that just means the home is that much more stable.
How it actually works
An underwater jeonse means (senior claims like mortgages + your deposit) exceeds the home's sale price (judged by the auction winning bid). A jeonse-to-value ratio (deposit ÷ sale price) above 80% is risky, and if jeonse plus existing loans exceed 70% of the sale price the underwater odds are high. At auction, winning bids run only 70–80% of market value, so the higher the ratio, the more impossible deposit recovery becomes. Cross-check prices using KB market data, actual transaction prices, and HUG's Ansim Jeonse app, and be especially wary of new builds with no price data.
⚠ Traps
- •New villas and multi-family homes have no objective market price, making it easy to be fooled by an inflated sale price — back it out from nearby actual transaction prices.
- •In multi-family homes, deposits of earlier tenants (senior claims) don't show up on the property register, so you must separately check the resident-registry listing and the fixed-date-stamp status.
- •The common belief that 'under 80% jeonse-to-value is safe' fails in a down market — such a property can even be rejected for deposit insurance.
✓ Good for
- · Jeonse tenants
- · Anyone signing for a new villa, multi-unit, or multi-family home
- · People wanting to gauge in advance whether deposit insurance will be approved
✗ Not for
- —
Verification score (rubric)
- Real cash savings
- Ease of conditions
- No traps
- Clear audience
- Validity
- Accessibility
yaho earns nothing from this link — not an affiliate.