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Korean Rent Cap Calculator

Verify Korean Housing Lease Act 5% rent cap on renewal. Deposit-monthly conversion + within-cap recommendation.

Current Terms

Proposed Terms

Conversion · Cap

Verification

Enter current and proposed terms.

What this tool does

The Korean rent cap calculator verifies whether a proposed rent increase at lease renewal complies with Article 8 of the Housing Lease Act Enforcement Decree, which caps annual increases at 5%. For mixed deposit + monthly rent leases, the calculator uses the conversion rate (Article 9, BoK base rate + 2%) to compute an equivalent deposit before applying the 5% cap. Tenants can verify whether a landlord's proposal exceeds the legal limit; landlords can simulate maximum deposit-only or rent-only increases within the cap.

Who uses this

  • Tenant: instantly verify whether the landlord's renewal proposal exceeds 5%
  • Landlord: simulate which side to increase (deposit or rent) within the cap
  • Real estate agent: provide objective limits during renewal negotiations
  • Deposit ↔ rent conversion: compare options on an equivalent-deposit basis
  • Dispute prevention: establish a legal reference when contesting an over-cap notice

How to use (5 steps)

  1. 1Enter the current deposit and current monthly rent in won. Pure jeonse: rent = 0. Pure monthly: deposit = 0.
  2. 2Enter the landlord's proposed deposit and proposed monthly rent. Either or both can be changed.
  3. 3Confirm the conversion rate. As of 2026-05 it's about 5.0% (BoK base 3.0% + 2%). Update if the base rate changes.
  4. 4The cap defaults to 5%. Some local ordinances may set a lower cap (e.g., 4% in certain districts) — adjust if applicable.
  5. 5Click Verify. You'll see the increase rate, pass/fail status, excess or remaining amount, and the maximum deposit-only or rent-only increase that would stay within the cap.

Equivalent deposit formula (Article 9)

Equivalent deposit = deposit + (monthly rent × 12 / conversion rate) Example: deposit KRW 50M + monthly KRW 500K at 5% conversion = 50M + (500K × 12 / 0.05) = 50M + 120M = KRW 170M 5% cap = current equivalent deposit × 1.05 Example: 170M × 1.05 = KRW 178.5M If the proposed equivalent deposit ≤ cap → within limit If above cap → tenant may exercise renewal rights and reject the excess

Real examples

Example 1: KRW 500M jeonse → landlord proposes KRW 530M (+6%)

Equivalent deposit = KRW 500M (no rent). Cap = KRW 525M. Proposal = KRW 530M → KRW 5M over. Tenant exercising renewal rights accepts up to KRW 525M. If refused, the dispute mediation committee can be petitioned.

Example 2: KRW 100M + KRW 800K monthly → landlord wants KRW 120M + KRW 800K

Current equivalent = 100M + (800K × 12 / 0.05) = 100M + 192M = KRW 292M. Cap = KRW 306.6M. Proposed equivalent = 120M + 192M = KRW 312M → KRW 5.4M over. Within cap, deposit could go up to KRW 114.6M (rent unchanged).

Example 3: Rent KRW 500K → KRW 530K (+6%)

Deposit KRW 50M + rent KRW 500K. Equivalent KRW 170M. Cap KRW 178.5M. New equivalent (rent KRW 530K) = 50M + (530K × 12 / 0.05) = 50M + 127.2M = KRW 177.2M < KRW 178.5M → within cap. A 6% rent increase translates to only ~4.2% on the equivalent basis.

Frequently asked questions

Does the 5% cap apply to all leases?+

Only when the tenant exercises the renewal right (6 to 1 months before lease end). It does not apply to new contracts, implied renewals, or when the landlord has a legitimate refusal reason (such as personal occupancy).

Can the landlord refuse renewal claiming personal occupancy?+

Yes, if the landlord or their direct family will actually live there. However, if they falsely refuse and lease to someone else within 2 years, the tenant can claim damages.

How many times can renewal rights be exercised?+

Once after the initial contract, granting an additional 2 years. So 2 years initial + 2 years renewal = 4 years total guaranteed by law.

How is the conversion rate set?+

Article 9 sets it at 'BoK base rate + 2%'. If the base rate is 3.0%, the conversion rate is 5.0%. Check the Bank of Korea's website for the current base rate and update the calculator.

Can I raise only the deposit and keep rent the same?+

Yes. The calculator shows the maximum deposit when rent is unchanged. A deposit increase of 6-7% can still comply if the equivalent-basis change stays under 5%.

I already received an over-cap notice — what now?+

1) Send a formal renewal-rights notice in writing (certified mail). 2) State your acceptance of the within-cap amount. 3) If the landlord refuses, petition the housing dispute mediation committee.

Can local ordinances set a lower cap?+

Yes — Article 8 defines '5% or less', allowing local ordinances to lower it. Some districts apply 4% or less. Check your local government's ordinance.

Cautions

  • •This tool verifies the renewal-time cap. New contracts are not subject to the 5% rule.
  • •The conversion rate varies with the BoK base rate — enter the latest value.
  • •Local ordinances may set a stricter cap. Check your district's rules.
  • •The landlord's legitimate refusal reasons (personal occupancy, demolition, tenant breach) override renewal rights.
  • •Results are for reference. Legal force comes from the dispute committee or court decision.

Last reviewed: 2026-05-23

Korean Rent Cap Calculator — 5% renewal limit verification