Set opportunity cost to zero and jeonse always wins
Comparisons that favour jeonse usually assume the deposit earns nothing. Use the after-tax return you would really get.
Real Estate Tool
Jeonse vs Monthly Rent Calculator — Real Monthly Cost Comparison
Compare the true monthly cost of jeonse (loan interest + opportunity cost) vs monthly rent including deposit opportunity cost.
Jeonse vs Monthly Rent Calculator
Jeonse (전세)
Monthly Rent (월세)
Enter info and compare
How It Works
What is opportunity cost?
The return you could have earned if your deposit were invested elsewhere is treated as a cost of holding that deposit.
* Actual costs may vary with interest rate changes, maintenance, and transaction costs.
Official sources
확인일 2026-09 · 금리와 법정 전환율 상한은 수시로 바뀌므로 계약 전 원문을 확인하세요.
Putting jeonse and monthly rent in the same unit
Jeonse locks up a lump sum; monthly rent leaves every month. They are not comparable as-is, so this tool converts both into what actually disappears per month: for jeonse, loan interest plus the opportunity cost of your own deposit; for rent, the rent plus the opportunity cost of its smaller deposit.
How to use
- 1 Enter the jeonse deposit, how much of it is borrowed, and the loan rate.
- 2 Enter the monthly-rent terms (deposit and monthly amount).
- 3 Set the opportunity-cost rate — the after-tax return you would actually get elsewhere.
- 4 Compare monthly real cost, and check whether the gap exceeds moving and agency fees.
What this comparison usually gets wrong
The conversion rate has a legal ceiling
Converting an existing deposit into monthly rent is capped by law; a demand above the cap is ineffective as to the excess.
Deposit risk is not in the number
Jeonse carries the risk of not getting the deposit back, which this calculation ignores. Adding the guarantee premium to the monthly cost is closer to reality.
FAQ
Is there a legal ceiling on converting a deposit to monthly rent?+
Yes. Article 7-2 of the Housing Lease Protection Act and Article 9 of its Enforcement Decree cap the rate used when converting an existing deposit into monthly rent at the lower of 10% per year and the Bank of Korea base rate plus a rate set by Presidential Decree. Because it tracks the base rate it is not a fixed number, and any excess above the cap is ineffective. Note the cap governs conversion of an existing contract, not the terms of a brand-new one. Check the current text at Korea's national law information centre. (Checked 2026-09)
What opportunity-cost rate should I enter?+
There is no single right answer, but there is a rule: the after-tax return you would actually get on that money. Someone who would keep it in a deposit account should not enter an equity expected return — that unfairly favours monthly rent. Entering 0% makes jeonse win automatically. Running it twice, once with a deposit rate and once with your real portfolio return, is more informative than one number.
It says jeonse is cheaper. Can I take that at face value?+
Two things are missing. First, the risk of not getting the deposit back; second, the guarantee premium you would pay to reduce that risk. Adding the premium to the monthly cost narrows and sometimes reverses the gap. Jeonse loan rates are also often variable and can rise during the term.
Why is the monthly-rent tax credit not included?+
Eligibility depends on total salary, home size and household status, so applying it uniformly would produce a wrong number more often than a right one. If you qualify, divide the annual refund by twelve, subtract it from the rent side, and look again. Requirements are published by Korea's National Tax Service.
Related calculators
For reference only; taxes, agency fees, maintenance charges and moving costs are excluded. Rates and the statutory conversion ceiling change, so confirm with the official sources below before signing.