Financial authorities plan to review mortgage loans with a maximum term of 40 years to help young people buy their first homes, officials said Tuesday.

Financial Services Commission (FSC) Chairman Eun Sung-soo unveiled the plan at a time when surging home prices make it more difficult for young people to buy homes.

This year, the FSC will study the plan to offer 30-year or 40-year mortgage loans and seek to begin a "trial" offering to sell such products, Eun said.

The plan is aimed at cutting mortgage rates for first-time young buyers by allowing them to repay home loans over as much as 40 years, Eun said.

Aided by cheap loans and low interest rates, soaring housing prices have showed no signs of a letup despite the government's efforts to stabilize the real estate market.

To address a shortage of supply in the Seoul metropolitan area, home to nearly half of the nation's 52 million population, the government said it will lower regulations on redevelopment and raise the residential floor area ratio in the densely populated urban area.

Home prices in South Korea rose at the fastest pace in nine years in 2020 with a 5.36 percent on-year surge, according to data from the Korea Real Estate Board, amid low interest rates and ample market liquidity. (Yonhap)