Jeonse is a uniquely Korean rental system where the tenant pays a large lump-sum deposit (typically 50–80% of property value) to the landlord. No monthly rent is paid; at the end of the lease, the full deposit is returned. The landlord earns interest by investing the deposit.
The Housing Lease Protection Act caps the jeonse-to-monthly conversion rate. For 2024, the legal maximum is 2.5%/year (= Bank of Korea base rate + regulatory margin). Landlords converting jeonse to monthly rent on a renewal cannot exceed this rate.
With no monthly deposit and a 2.5% rate: (300,000,000 × 2.5%) ÷ 12 = KRW 625,000/month. Market rates may differ from the legal cap.