Jeonse money is usually borrowed, too. At a much lower interest rate than you would get for a typical mortgage, because the landlord effectively guarantees that

Jeonse money is usually borrowed, too. At a much lower interest rate than you would get for a typical mortgage, because the landlord effectively guarantees that loan. Until recently, it's been much cheaper to pay interest on a jeonse loan than to pay rent. Typical jeonse tenants start with savings equal to 10-20% of the value of the property. (To buy an apartment, on the other hand, they would need a down payment of at least 30-40% due to LTV restrictions.) They borrow the rest of the deposit from a bank. The landlord takes that money and adds their own loan to buy more houses, invest in coins, or whatever. So everything is leveraged at least twice. Of course this scheme all crumbles down when interest rates go up and property values drop.