Jae and her husband, who moved to Seoul from Toronto, found a one-bedroom near Hapjeong. The agent offered two deals for the same flat: ₩10 million deposit and ₩700,000 a month, or ₩50 million deposit and ₩530,000 a month.
They had the savings for the bigger deposit, but handing a stranger ₩50 million felt terrifying.
Both deals price the deposit at about 5% a year. If your savings earn less than 5% and the building is safe, the bigger deposit costs less over a two-year lease. The real question is the safety of the deposit, not the math.
The three kinds of lease
| Type | Korean | What you pay |
|---|---|---|
| Monthly rent | 월세 (wolse) | Deposit (often ₩5–30M) + monthly rent |
| Half-jeonse | 반전세 (ban-jeonse) | Large deposit + small rent |
| Jeonse | 전세 | Very large deposit, no rent |
Every deposit (보증금) is returned when you move out, minus unpaid rent or damage. Expats often call it “key money.”
How deposit turns into rent
Rent saved per month = extra deposit × conversion rate ÷ 12
When a landlord converts deposit to rent during an existing lease, the law caps the rate at the Bank of Korea base rate plus 2 percentage points (currently 3.00% + 2 = 5%). New leases are a free negotiation, but the cap is a useful benchmark for whether an offer is fair.
Moving from ₩10M to ₩50M deposit = ₩40M more deposit.
At 5%: ₩40,000,000 × 5% ÷ 12 = ₩166,667 less rent a month.
₩700,000 − ₩166,667 = about ₩533,000, so the agent's ₩530,000 is fair.
Two-year cost, counting 3% interest the deposit could have earned: ₩17.4M for the small deposit vs ₩15.8M for the big one.
When a bigger deposit makes sense
The building has a large mortgage on the registry, the landlord owns many units, you might leave early, or the deposit is most of your savings.
The registry is clean, the deposit plus existing debt is well below the property's value, you'll stay the full 2 years, and you can get deposit insurance.
Jeonse fraud (전세사기) has cost tenants, Korean and foreign, billions of won in recent years. It almost always involves a building whose debts plus deposits exceed its value. Read how to protect your deposit before signing anything large.
Foreign residents with an ARC can sign jeonse leases and register for the same protections as Koreans, but bank loans for jeonse are harder to get. Plan with the cash you actually have.
Compare your own offers with the jeonse/wolse converter.
Sources: Housing Lease Protection Act art. 7-2 and Enforcement Decree art. 9; Bank of Korea base rate (3.00%, 27 August 2026).
Try it with your own numbersJeonse / Wolse Rent ConverterSee how much your monthly rent changes if you pay a bigger or smaller deposit, and which deal costs less over two years.Written from the laws and official notices in force on the date above. Rules change and every case is different, so check with the office named in the article before an important decision. Spotted something out of date? Tell us.