Globally, various regulations regarding rent control and lease agreements are enacted with the aim of stabilizing the real estate market and ensuring tenants have access to stable housing options. This paper delves into the impact of extending lease contract terms, a strategy used alongside lease agreement regulations in South Korea for rent control purposes. It particularly forecasts outcomes using a theoretical framework that incorporates the mortgage-like characteristics of the chonsei system—a distinct lease arrangement prevalent in Korea—and considers the risk of default. This model illustrates how the nearly unconditional extension of chonsei contracts can lead to heightened prices for new chonsei deposits across comparable properties and areas. This escalation prompts a shift from traditional chonsei arrangements to a hybrid model that includes monthly rent payments. Additionally, this research adopts an empirical methodology to corroborate the predictions made by the theoretical model, drawing on credit score data from leading banks and information on real estate transactions. The study sheds light on the paradoxical outcomes of policies aimed at housing stability and explores potential structural shifts within the rental market, proposing pertinent policy recommendations in response to these findings.