How to Convert a Jeonse Deposit into Monthly Rent in Korea

Jeonse is a uniquely Korean lease: instead of paying rent every month, a tenant hands the landlord a large lump-sum deposit and gets the whole amount back when the lease ends. Sooner or later you need to compare a jeonse listing against a monthly-rent (wolse) one, and that means converting the deposit into an equivalent monthly rent — or running the conversion in reverse. This post explains the conversion rate, gives the exact formula, works through a real example, and provides a calculator you can use directly.

What the conversion rate means

The conversion rate is the annual percentage a landlord applies to the part of a deposit that is turned into rent. If you keep the full amount as a deposit, no rent is due; if you convert part of it, that converted slice earns the landlord an annual return equal to the rate, and you pay that return as twelve monthly installments.

Two numbers drive everything: the deposit you start from and the rate the landlord quotes. A third number, the amount you actually convert, is optional — leave it equal to the deposit to price a full switch to monthly rent, or lower it to keep part of the money as a deposit.

The formula

The monthly rent is the converted amount times the annual rate, spread over a year:

monthly rent = (deposit - retained deposit) x rate(%) / 100 / 12

The retained deposit is whatever you decide to leave as a lump sum. When you convert the entire deposit, the retained deposit is zero and the whole amount feeds the rent. The reverse direction simply rearranges the same equation: given a monthly rent, the converted amount is rent x 12 x 100 / rate.

Set your own numbers below. The calculator recomputes as you type, so you can feel how a small change in the rate moves the monthly figure.

A worked example

Take a deposit of 300,000,000 won and a conversion rate of 5.5%, converting the whole amount. Plugging into the formula:

300,000,000 x 5.5 / 100 / 12 = 1,375,000 won per month

So a 300-million-won jeonse is, at 5.5%, roughly equivalent to 1,375,000 won of monthly rent with no remaining deposit. If instead you kept 100,000,000 won as a deposit and converted only 200,000,000 won, the rent drops to about 916,000 won while you still owe the retained 100 million as a lump sum. Comparing two listings comes down to running both through the same rate and looking at the monthly numbers side by side.

The statutory ceiling

Korea's Housing Lease Protection Act caps how high a conversion rate may go, and the ceiling is tied to the Bank of Korea base rate, so it moves over time. The calculator does not assume a fixed limit — it uses whatever rate you enter — because the exact ceiling depends on the region and the date of the contract. Before you sign, confirm the current statutory maximum for your situation rather than trusting a rate a listing quotes.

When the conversion is worth running

Run the numbers whenever a jeonse and a monthly-rent option sit close in total cost, when a landlord offers to convert part of a deposit, or when rising rates make a lump sum look expensive against renting the same money elsewhere. The arithmetic is small, but doing it explicitly keeps a headline deposit from hiding the monthly cost it really represents.