Jeonse vs Wolse in Korea: Which Is Cheaper? Monthly Cost and Break-even Rate
Jeonse has no monthly rent, but the deposit money has a cost: loan interest if you borrow it, or the savings interest you give up. Convert that to a monthly figure and you can compare it with wolse directly.
Break-even rate = monthly rent × 12 ÷ (jeonse deposit − wolse deposit). If your loan or savings rate is below it, jeonse costs less per month; above it, wolse does.
Jeonse puts far more money at risk if the deposit is not returned, so weigh deposit protection (residence report, fixed date, deposit insurance) as well as the monthly cost.
- Jeonse vs Wolse Calculator ›Which costs less per month: a big jeonse deposit or a smaller deposit plus monthly rent?
- Deposit to Monthly Rent Calculator ›Convert part of a deposit into monthly rent and check the legal conversion-rate cap.
What jeonse and wolse are
Jeonse (전세) is a lease where you hand the landlord a large deposit, often a big share of the home’s value, and pay no monthly rent. The full deposit comes back at the end of the lease. Wolse (월세) is a lease with a smaller deposit plus monthly rent. Many leases mix the two (반전세, “semi-jeonse”).
How to compare them
The deposit is not free money. If you borrow it, you pay loan interest; if you use your own savings, you give up the interest they would earn. Turn that into a monthly cost and add it to the rent.
| Lease | Monthly cost |
|---|---|
| Jeonse | Jeonse deposit × rate ÷ 12 |
| Wolse | Monthly rent + wolse deposit × rate ÷ 12 |
The break-even rate
The rate at which the two cost the same is: monthly rent × 12 ÷ (jeonse deposit − wolse deposit). Below it, jeonse is cheaper per month. Above it, wolse is cheaper.
Compare your two offers with the jeonse vs wolse calculator
A worked example
A hypothetical ₩300 million jeonse against a ₩50 million deposit with ₩1 million monthly rent. Break-even: ₩1,000,000 × 12 ÷ ₩250,000,000 = 4.8%.
| Rate | Jeonse / month | Wolse / month | Cheaper |
|---|---|---|---|
| 3% | ₩750,000 | ₩1,125,000 | Jeonse (saves ₩375,000) |
| 4.8% | ₩1,200,000 | ₩1,200,000 | Same |
| 6% | ₩1,500,000 | ₩1,250,000 | Wolse (saves ₩250,000) |
Which rate to use
| How you pay the deposit | Rate to use |
|---|---|
| All borrowed | Your jeonse loan rate |
| All from savings | The after-tax rate those savings would earn |
| Part loan, part savings | The two rates weighted by amount |
Interest on Korean bank deposits is taxed at 15.4% in total, so a 3% savings account earns about 2.54% after tax. Use the after-tax figure.
What the numbers leave out
The risk of not getting the deposit back
With jeonse the deposit is large, so if the home’s price falls or the landlord cannot pay, the loss is large too. The small-deposit priority rule protects part of a deposit at auction only when the whole deposit is at or below the regional threshold, which most jeonse deposits in Seoul are not.
How to protect your lease deposit in Korea
Converting during the lease
If you agree mid-lease to turn part of a jeonse deposit into monthly rent, the conversion rate is capped by Article 7-2 of the Housing Lease Protection Act: the lower of 10% or the base rate plus 2 percentage points.
Deposit to monthly rent calculator
Common questions
Q. When interest rates rise, which becomes cheaper?
A. Wolse. Higher rates make the money tied up in a jeonse deposit more expensive. When rates fall, jeonse becomes relatively cheaper.
Q. How do I compare a semi-jeonse offer?
A. The same way: enter its deposit and rent as the wolse side, or compare it with a pure wolse offer using the same formula.
Q. What other costs should I add?
A. Agent fees, moving costs, deposit insurance premiums and maintenance fees are not included. Add any that differ between the two offers.
This guide explains Korean law in general terms and is not legal advice. Laws change, so check the official text before you act.
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