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1st Cabinet Meeting Freezes Mortgage Rate at 5.2%

Posted March. 04, 2008 03:00,   


With rising inflation taking its toll on low-income households, President Lee Myung-bak and his Cabinet in their first meeting yesterday discussed stabilizing the livelihood of lower-income earners and supporting the self-employed and small business owners.

They also froze the mortgage loan rate at 5.2 percent.

The National Housing Fund lends up to 100 million won to a household with an annual income of 20 million won or less when the family wants to buy a house under 85 square meters. A loan of up to 60 million won can go to a household with an annual income of 30 million won or less when it rents a home smaller than 85 square meters.

The fund is worth 4.5 trillion won.

To boost the competitiveness of traditional open-air markets, the government will create parking lots for them nationwide. The decision was based on the difficulty that such markets have in attracting consumers, who prefer the convenience of discount stores with large parking lots.

Only 43 percent of traditional open-air markets in the country have parking lots.

Credit card commissions will also be readjusted to a more reasonable level. Based on an analysis of commission costs conducted last year, the government will keep a close watch to see if credit card firms transfer their financial burden to the self-employed.

To support small businesses, a revised law on subcontracting will go to the National Assembly for a vote in June. The law will help small entrepreneurs to reflect rising prices of raw materials onto their products made for large corporations.

This month, the government will put scrap iron and iron bars on the list of products vulnerable to cornering and hoarding. Research will be conducted on other products, including flour, for possible inclusion on the list.

To stabilize the people’s livelihood, the government will implement measures that it has already announced. For example, the financial burden will be eased on low-income brackets by changing the billing system for electricity, cutting highway tolls up to 50 percent for those who use highways to get to work or home, and encouraging telecom companies to lower their rates.