The Jeonse Renewal Dilemma: Lock Up Your House Money as a Bigger Deposit?

Jeonse prices for Seoul apartments have jumped over the past two years. Tenants who signed in autumn 2024 now face a renewal question. Do they put more money into the deposit, or keep that money for buying a home? My own answer is simple. If the landlord asks for too much more, I think I would treat it as the moment to buy. If not in Seoul, then in Gyeonggi Province. I should say one thing up front: I am not a jeonse tenant. I live in an officetel and pay monthly rent. So this is the view of a monthly renter looking at the jeonse market from the outside.

What Renewal Looks Like This Autumn

According to the Korea Real Estate Board, as reported in the Korean press (in Korean), the average jeonse price for a Seoul apartment rose 14.9% in two years. It went from ₩553.95 million in August 2024 to ₩636.63 million in August 2026. That is ₩82.68 million more for the same kind of home.

For readers outside Korea, a short explanation. Jeonse is a lease where the tenant pays no monthly rent. Instead, the tenant gives the landlord a large lump-sum deposit and gets it back when the lease ends. At the prices above, that means a tenant can have hundreds of millions of won sitting with a landlord.

The problem is that the same money often has two jobs. Many tenants are also saving to buy a home. If they put those savings into a bigger deposit, the money is locked with the landlord. Local reports point out that you have no right to get part of the deposit back early just because you found a home to buy. Before the lease ends, the landlord has to agree. If you have a jeonse loan, money that comes back may go to repay the loan first. And even when a lease ends, there is no guarantee the deposit arrives that same day. If it is late, you may have to agree on a new closing date with the seller.

How you renew also matters. Korean reporting (in Korean) set out three paths: using the tenant’s legal right to request renewal, letting the lease renew automatically on the same terms, and signing a new agreement with the landlord. Under the first two, the tenant can give notice and leave after a set period. Under a negotiated renewal, leaving early depends on special clauses or a separate agreement. A condition like “after the next tenant is found” can mean you cannot leave on the day you want. The advice was to write the renewal type into the contract, because signing a new contract does not by itself make it a negotiated renewal.

Some tenants avoid a bigger deposit altogether. According to Ministry of Land, Infrastructure and Transport data reported locally (in Korean), look at Seoul apartment renewals this year where the tenant used the renewal right. In 1,061 of them, the deposit stayed the same and monthly rent was added instead. The median added rent was ₩130,000 a month, or ₩1.56 million a year.

Why I Would Lean Toward Buying

If the increase were too big, I think I would buy instead of renewing. My reason is not a calculation. It is unease. Jeonse prices could rise again by the next renewal, and nothing guarantees otherwise. I think I would feel anxious facing the same question two years later.

Behind that is a view about what jeonse money does. In my view, paying for housing through a jeonse deposit makes it hard to keep up even with inflation. If you buy an apartment, I suspect it would at least give you some protection against inflation. I hold this as a guess, not a certainty.

But If You Plan to Buy, the Deposit Is Not a Bad Place to Wait

This may sound like the opposite point, but I think it fits. If someone already plans to buy, keeping the money in a jeonse deposit does not seem bad to me. My understanding is that under current law, a buyer has to move in and live in the home. If that is right, the purchase and the end of your lease need to line up anyway. If the timing has to match, I think money in a deposit is more stable than money in stocks or other investments.

Here is something an English-speaking reader may find strange. A tenant can have a very large sum sitting with a landlord, and the tenant earns nothing on it while it sits there. It seems to me that most Koreans do not think much about the opportunity cost of money tied up in jeonse. The deposit is seen as safe money that comes back, not as money that could be doing something else.

Seoul or Gyeonggi

I said I would buy in Gyeonggi if not in Seoul, but that is not easy for me to say. My test is simple: if I could buy within commuting distance, I think I would buy. But I do feel some resistance to leaving Seoul. The parts of Gyeonggi that are nice to live in cost about as much as Seoul. If that is the case, I think it may be better to buy in Seoul, even if the home is smaller.

For me, the answer depends on children. Without children, I prefer Seoul and a home near a subway station, even if it is small. With children, the living environment matters more, so I think I would choose Gyeonggi. The same person, with the same money, would make opposite choices depending on the household.

The Market Around the Decision

The rest of Seoul housing is not standing still either. According to the Korea Real Estate Board, Seoul apartment prices rose for an 86th straight week (in Korean) as of September 28, passing the old record of 85 weeks. Gangnam, Seocho and Songpa fell, while districts like Seodaemun and Seongbuk rose. Borrowing is getting more expensive: bank mortgage rates averaged 4.66% in August (in Korean), up 0.18 percentage points in a month and the highest in three years and nine months. And supply may stay tight. From January to August, permits and construction starts for Seoul housing rose more than 40% from a year earlier, but completions fell 19.1% (in Korean).

None of this makes the choice easier. But it explains why, for many tenants, this renewal is not just about the deposit. It is about whether to keep waiting at all.

Where I Land

So my answer has two parts. If you already plan to buy and the timing has to line up, a jeonse deposit seems like a reasonable place for the money to wait. If the landlord asks for too much, I would take that as a push to buy now, within commuting distance. Without children, I would aim for Seoul. With children, I would choose Gyeonggi. Either way, I would think about what that money could be doing elsewhere. Most Koreans, it seems to me, do not.

This is my own view as an individual investor, not legal, tax or financial advice. Check your lease terms before you decide.