Monthly Rent (Wolse)

A lease arrangement in which rent is paid monthly alongside a security deposit; along with the conversion of jeonse into monthly-rent contracts, it has become a core contract type in the housing marke

Monthly Rent (Wolse)

Overview

Monthly rent (月貰, wolse) is a form of lease in which the tenant pays the landlord a set amount of rent each month, together with a security deposit, in return for the use of real estate such as a building or land. Whereas jeonse is a structure in which the tenant entrusts the entire lump sum and pays no usage fee, monthly rent lowers the lump-sum burden but creates monthly cash outlays. As jeonse continues to convert into monthly rent amid interest rate fluctuations and the aftermath of jeonse fraud, monthly rent has established itself as a core contract type in the Korean housing market.

Key Details

Basic Structure and Terminology

A monthly-rent contract typically consists of a security deposit plus monthly rent, and the contract period is two years by default under the Housing Lease Protection Act. Because the monthly rent a tenant pays is consideration for the use of the building, the landlord bears the duty to repair and maintain the property during the lease term, while the tenant bears the duty to restore it to its original condition. Monthly rent is also widely used for non-residential real estate such as commercial buildings, land, and factories, but housing monthly rent is distinguished by the fact that separate legal protections apply.

Types of Monthly Rent

Deposit-based monthly rent: The most common form, in which a security deposit and monthly rent are paid together.
Ban-jeonse (semi-jeonse): A form in which the deposit is raised to jeonse levels and the monthly rent is lowered; demand shifts toward it as an alternative to jeonse during periods of rising interest rates, and as an alternative to monthly rent during periods of falling rates.
Pure monthly rent (no-deposit monthly rent): A form in which only monthly rent is paid with no security deposit, minimizing the initial capital burden.
Commercial and land monthly rent: Governed by separate rules under the Commercial Building Lease Protection Act, including key money (gwonrigeum) and converted deposit amounts.

Jeonse-to-Monthly Rent Conversion Rate and Rent Calculation

The rate applied when converting jeonse into monthly rent or vice versa is the jeonse-to-monthly rent conversion rate. The formula is (monthly rent × 12) ÷ (jeonse deposit − monthly-rent deposit) × 100. The Housing Lease Protection Act caps this rate at the lower of either the Bank of Korea base rate plus 2 percentage points or 10%, so when the base rate falls, the statutory ceiling falls with it. In the base-rate cutting phase of 2024–2025, the ceiling was adjusted downward, producing the effect of limiting unilateral rent increases by landlords.

Contracts and Legal Protection

Housing monthly-rent contracts are subject to the Housing Lease Protection Act. The lease term is guaranteed for two years, and the tenant may exercise the right to request a contract renewal once, allowing residence of up to four years. On renewal, the cap on rent increases applies, limiting increases to within 5%. If the tenant continues to reside after the contract expires, an implied renewal takes place, and in that case the two-year term is also guaranteed. Tenants must file a move-in report and obtain a fixed date stamp to secure the right to preferential repayment of the deposit, and housing leases with a deposit exceeding 60 million won or monthly rent exceeding 300,000 won are subject to the lease reporting system. To prepare for deposit-return risk, it is safer to verify enrollment in a jeonse deposit return guarantee (HUG, HF) or the landlord's guarantee insurance.

Taxation and Support Programs

Tenants who meet the total salary requirements and the no-homeownership condition can receive a tax credit for monthly rent during year-end tax settlement. The credit rate and income thresholds have gradually expanded through amendments to the Restriction of Special Taxation Act. On the landlord side, taxation applies to rental income from housing, and depending on the annual scale of rental income it is handled either as separate taxation or as comprehensive taxation. Public monthly-rent support programs targeting young adults, newlyweds, and the elderly are also in operation.

Disputes and Points to Note

The most frequent disputes in monthly-rent contracts are delayed deposit returns, the scope of restoration to original condition, unpaid rent, and termination notices after implied renewal. The contract must clearly state the deposit, monthly rent, and maintenance fee items, the scope of responsibility for repairs, and the timing and method of return, and it is essential to check the register copy for mortgages or provisional seizures. If items included in the maintenance fee are not distinguished from items billed separately, this becomes a source of dispute.

Recent Trends

The most notable feature of the monthly-rent market in 2024–2025 is that the conversion of jeonse into monthly rent is becoming structurally entrenched. After the jeonse fraud crisis of 2023, demand for taking on large deposits declined and landlords sought to avoid the burden of returning deposits, so a growing number of complexes in Seoul saw monthly rent exceed half of all apartment leases. In addition, as the base rate cuts that began in the second half of 2024 lowered the ceiling on the jeonse-to-monthly rent conversion rate and eased loan rates, demand to return to semi-jeonse coexists with demand to accept still-high monthly rents.

On the policy side, monthly-rent support to ease the housing cost burden on young adults has been expanded. The Youth Monthly Rent Special Support program provides up to 200,000 won per month for up to 12 months to young adults aged 19–34 who do not own a home, and following the second round of the program in 2024, eligibility and the number of recipients were expanded again in 2025. In addition, institutional restructuring of the lease market continues, including reform of the registered rental housing system, the settling in of the lease reporting system, and the expansion of mandatory enrollment in jeonse deposit return guarantees. As market price lookups and electronic contracts through real estate platforms become commonplace, access to information for monthly-rent contracts is also improving markedly.