The Jeonse Conversion Rate
What is the conversion rate?
The conversion rate is the annual rate used to turn a jeonse deposit into monthly rent. For renewals, the Housing Lease Protection Act caps it at the lower of base rate + 2%p or 10% — e.g., a 3.5% base rate gives a 5.5% cap.
How to calculate
Monthly rent = converted deposit × rate ÷ 12. Converting a 100M KRW deposit at 5.5%/yr gives 458,333 KRW/month; conversely, 500,000 KRW rent ≈ 109,090,909 KRW of deposit. Use the converter for your own numbers.
What to check when signing
① The legal cap applies to conversions within renewals, not to new-lease market prices. ② A higher rate favors the landlord — compare with published statistics. ③ When the deposit shrinks, re-check protections such as deposit-return guarantees and fixed-date registration, and consult a licensed agent or attorney with the property register for disputes.
How the cap actually moved with the base rate
| Effective date | Base rate | Cap (base rate + 2%p) |
|---|---|---|
| 2025-05-29 | 2.50% | 4.50% |
| 2026-07-16 | 2.75% | 4.75% |
| 2026-08-27 | 3.00% | 5.00% |
Each time the base rate changes, the cap shifts by the same amount. As the table shows, when the base rate falls and later rises again, the cap tracks it step for step — so using an outdated base rate at renewal time can produce the wrong cap. See the base rate guide for the fuller trend.
Comparing by deposit size — 50M, 100M, 200M KRW
| Deposit | Monthly rent equivalent |
|---|---|
| 50,000,000 원 | 229,167 원 |
| 100,000,000 원 | 458,333 원 |
| 200,000,000 원 | 916,667 원 |
At the same conversion rate, doubling the deposit exactly doubles the equivalent monthly rent — the formula is directly proportional to the deposit. This matters for partial jeonse-to-monthly ("半全貰") deals: apply the rate only to the portion being converted, not the amount kept as deposit. Converting 100M of a 200M deposit means using the "100M" row above — applying the full 200M row would double-count the rent.
When drafting the contract, spell out the total deposit and the converted amount separately rather than blending them into one figure — this heads off later disputes. Renewals in particular hinge on how much of the prior deposit/rent mix is being converted this time, so noting both the converted amount and the applied rate in the special-terms section gives you something concrete to point to if a cap dispute comes up.
Deciding whether to convert at all means weighing the rate against the interest that deposit would earn if left in place: above deposit rates, keeping the deposit wins; below them, converting does. Where borrowing is involved, the loan rate becomes the benchmark — the real question is whether reducing the deposit to repay debt costs less than the additional rent. Monthly rent may qualify for a deduction or credit and jeonse loan interest carries its own deduction, so the comparison holds only after tax.