Summary

As of the end of 2023, the total mortgage loan balance of the six major state-owned banks is about 26 trillion yuan, a decrease of more than 500 billion yuan from 2022. Among them, except for the Postal Savings Bank of China, the scale of housing mortgage loans has achieved positive growth, while the other five banks have all declined. In this regard, many banks mentioned the adjustment of the real estate market and the increase in the scale of early repayment in their annual reports.

Text｜Yan Qinwen

Editor: Hu Rongping Yuan Man

Zhou Yang still remembers the situation of buying a house in Shanghai in 2021.

The houses that were sold immediately after he saw them, the house prices that were rising almost every month... the slightly crazy market situation was irritating him all the time. It only took Zhou Yang one month from house viewing to signing the contract; but he waited more than three months from applying for a mortgage to the bank releasing the loan.

At that time, Zhou Yang's mortgage interest rate was 4.65%, so when Shanghai's mortgage interest rate was adjusted to 5% (LPR+35BP) a few months later, he was glad that he "acted early". After several rounds of subsequent LPR cuts, Zhou Yang's mortgage interest rate has reached 4.2% (Note: Because the loan contract stipulates that it will be adjusted on January 1 every year, it is not affected by this year's LPR adjustment), but the current mortgage interest rate generally implemented in Shanghai (3.4%) still makes him a little "overwhelmed".

This is also a microcosm of borrowers who bought houses in the past few years. As the LPR for more than 5 years dropped by 10 basis points to 3.85%, mortgage interest rates across the country were simultaneously lowered, and in some areas, the mortgage interest rates of banks have dropped to "2 digits".According to a research report by Guojin Securities, mortgage interest rates have dropped to a historically low level, but some existing mortgage interest rates are still above 4%.

What makes Zhou Yang feel that the times have changed is not only the mortgage interest rate, but also the recent posts on social platforms about rebate for home purchases that have attracted his attention. Many home buyers said that they received extra "surprises" when applying for mortgages at banks, some of which were cash directly deposited into their accounts, and some were gifts of a certain value. According to the experience shared by a home buyer in Shanghai, a 1 million yuan mortgage can get a rebate of nearly 10,000 yuan.

"The world has really changed. Not only have mortgage interest rates been lowered again and again, but there are even additional subsidies. Compared with three years ago, the roles of banks and borrowers have been reversed," Zhou Yang sighed.

Mortgage rebate

After the bank loan was issued, Ms. Du successfully received a rebate of 20,000 yuan recently. She considered it the right decision to buy her first home this year. "Not only is the mortgage interest rate low, but I can also get rebates. Nothing can be better than this."

In early June, Ms. Du was introduced by a friend to a mortgage application channel that offers rebates. After comparison, she chose to apply for a mortgage at a city commercial bank in East China, where the rebate is calculated at 0.6% of the loan amount. "The account manager is very enthusiastic and provides door-to-door service," Ms. Du said.

The above operations have long been an open secret.Searching for "mortgage rebate" on social media platforms, relevant cases have increased significantly in the past six months. The sharers are not from the same region. In addition to Shanghai, experience posts from Beijing, Guangzhou, Shenzhen, Suzhou, Chengdu, Tianjin and other places can also be seen everywhere.

When Caijing asked how to apply as a home buyer, the poster enthusiastically recommended relevant channels through private messages. Most of them need to be processed through an intermediary, while some will directly provide the contact information of the bank loan manager.

How to get a mortgage rebate? In simple terms, homebuyers should find a bank that can provide rebates before or after signing the online contract. After both parties reach an agreement on the rebate amount, they can apply for a mortgage. After the loan contract is formally signed, homebuyers will receive the rebate. The specific time varies, some are received after the loan is issued, and some are received during the loan review period.

At the same time, there are differences in the proportion and form of rebates.Taking Shanghai as an example, an intermediary directly returns cash. If it is handled through a large state-owned bank, the rebate is 0.6% of the total loan amount; if it is handled through another joint-stock bank, a rebate of 0.8% is provided.

There are also intermediaries that offer gifts of corresponding prices. According to a home buyer, he recently applied for a mortgage of about 800,000 yuan at a joint-stock bank through the intermediary. Before the loan was released, he received home appliances worth about 5,000 yuan. If he handles the application through the intermediary at a large state-owned bank, the gift provided is a gold bar with a value of about 0.5% of the total loan amount.

It is worth noting that some intermediaries said that banks have certain requirements for borrowers' loan repayment plans. "You can repay part of the money in advance one month after the loan is issued, but it cannot be paid off in the first year." said an intermediary.

However, if you apply for a mortgage in this way just to get a rebate, there are certain risks for some home buyers who don't understand the process well enough.

"Recently, a client's house was mortgaged without his knowledge, and the bank refused to approve the loan." A practitioner said, "Generally, real estate agents are familiar with the process and will assist buyers in completing the landlord's property survey, but some buyers choose to apply for mortgages by themselves or avoid real estate agents in order to get rebates, which may happen. Some informal institutions will help customers package materials to promote transactions, and the consequences will be more serious if they are discovered."

Role reversal

A person from a joint-stock bank pointed out that in the cooperation between banks and real estate agencies, there will be a "business consulting fee" or "promotion fee" that will be deposited into the other party's company account in a public-to-public form, but the mortgage applicant cannot get this money.

Another type is third-party institutions (mortgage intermediaries), which are also the main promoters of mortgage rebates. Caijing contacted a practitioner as a home buyer. According to his introduction, the bank will sign a package contract with him, with specific indicators. The rebate is mainly to attract customers. The fees are paid in advance, and the bank will pay the marketing fees later. In this process, home buyers do not need to pay any fees.

"Generally, banks that lack performance will come to us for marketing. We had this last year, but this year, banks are getting more and more competitive, so we will increase our rebate."The above-mentioned practitioner further stated that the amount of rebate received by mortgage applicants is not only related to the loan amount, but will also be adjusted according to the fees invested by the bank.

In order to attract customers, social platforms have become a major advertising platform for such organizations. After Caijing sent a private message for consultation, the poster would directly provide contact information. According to a practitioner, some cases on social platforms are not real, but are just to attract customers. "Sometimes, we will ask customers to write sharing posts and pay a certain amount of money for successful recommendations."

Behind the intermediaries’ vigorous promotion of mortgage rebates is the growth pressure on banks’ mortgage business.

Taking the six major state-owned banks as an example, annual report data show that by the end of 2023, the total mortgage loan balance will be about 26 trillion yuan, a decrease of more than 500 billion yuan from 2022. Among them, except for the Postal Savings Bank of China, the scale of housing mortgage loans has achieved positive growth, while the other five banks have all declined.In response, many banks mentioned the adjustments in the real estate market and the increase in prepayments in their annual reports.

According to financial statistics released by the People's Bank of China, household loans increased by 1.46 trillion yuan in the first half of this year, of which medium- and long-term loans representing residential housing loans increased by 1.18 trillion yuan. In 2021-2023, the figures are 3.43 trillion yuan, 1.56 trillion yuan and 1.46 trillion yuan respectively.

"Three years ago, if you wanted to speed up loan approval, you might have to beg the bank, and some people would even have to wait in line for more than half a year. The situation is different now. Some banks have difficulty meeting their targets, so they will pay our marketing fees," said an employee of a third-party agency.

A person from the credit department of a bank in East China said that the mortgage loan completion rate of his branch was less than 50% in the first half of the year, and the pressure to achieve the annual target is self-evident."The mortgage interest rate is set by the head office, so it cannot be lowered any further. In this case, paying marketing fees to third-party agencies to attract customers is also a helpless move."

In addition to the vigorous marketing of intermediaries, some bank account managers will also personally participate. A user who successfully received rebates through mortgage business said that after receiving a private message from the account manager who actively promoted it, he successfully got the mortgage rebate through the account manager.

However, when Caijing asked several bank account managers in the capacity of a home buyer whether they could get commission rebates, they all received negative answers.A person from a joint-stock bank said: "It is not compliant for banks to directly rebate customers, but it is not ruled out that some account managers pay out of their own pockets in order to meet their targets."

In his view, rebates can easily lead to vicious competition among banks and affect bank credit security. "This kind of operation has been restricted before, and now some banks are doing it again in order to compete for loan resources," the above-mentioned person further pointed out.

According to the "Notice on Self-Discipline Consensus on Regulating Personal Real Estate Mortgage Loan Business and Maintaining Market Order" issued by the China Banking Association in 2010, it was required that from January 1 of that year, any form of "rebate" fees that were asymmetric to the services provided and were purely for business introductions should be stopped from being paid to mortgage intermediaries and their employees.

When is the right time to buy a house?

The reversal of identities between banks and borrowers over the past few years reflects the changes in the real estate market.

According to the National Bureau of Statistics, from January to June this year, the sales area of ​​newly built commercial housing was 479.16 million square meters, a year-on-year decrease of 19.0%, of which the residential sales area decreased by 21.9%. The sales of newly built commercial housing was 471.33 billion yuan, a decrease of 25.0%, of which the residential sales decreased by 26.9%. In the same period of 2021, the sales area of ​​commercial housing was 886.35 million square meters, and the sales of commercial housing was 929.31 billion yuan.

However, the frequent release of favorable policies has led some home buyers to believe that now is a good time to buy a house."Nowadays, the down payment is small, the loan is released quickly, the interest rate is low, and there are more houses to choose from on the market," said a home buyer.

Data from Huatai Securities showed that in June 2024, the average interest rates for first and second home loans in 100 cities fell by 5 basis points (basis points) and 8 basis points from May to 3.40% and 3.82%, respectively, both the lowest levels since 2014. The loan period in 100 cities was 28 days, which slowed by 6 days from May, but was still at a relatively fast level since 2019.

A person from a joint-stock bank in Shanghai told Caijing that in terms of personal housing loan business, judging from the recent business volume handled by the bank, the weekly transaction volume has increased four to five times compared with the previous low point. "It can be said that it has returned to the level of a few years ago. We are so busy that even the weekends are full."

But the above does not represent the whole picture of the market.The "Survey Report on Residents' Home Purchasing Intentions in June 2024" (hereinafter referred to as the "Report") recently released by China Index Academy shows that the willingness to buy a house in first-tier cities has bottomed out and rebounded. At the end of June, the proportion of people with stronger willingness to buy a house than the previous month was about 28%, an increase of 0.8 percentage points month-on-month; the willingness to buy a house in second-tier, third-tier and fourth-tier cities showed a continuous downward trend, and the proportion of people with stronger willingness to buy a house in June than the previous month decreased by 3.9 percentage points and 1.9 percentage points respectively.

The report also pointed out that the current obstacles to home purchases are still obvious, among which the continued decline in housing prices has become the main obstacle to home purchases.Concerns about falling housing prices increased rapidly from May to June, especially during the policy favorable window period. Real estate developers increased their efforts to reduce prices to recover funds and increased discounts. House prices in 70 cities fell by a new high, leading to increased concerns among residents about falling housing prices. In June, the proportion was about 43%, ranking first among resistance factors, up 5.3 percentage points from April.

"The cost of buying a house has been reduced now, and the previously scarce resources have been released, so the transaction volume has increased. But this is because there is a lot of inventory on the market, and it takes a certain amount of time to consume it. It is still unknown whether housing prices can rise." said a senior real estate industry practitioner.

(At the request of the interviewee, Zhou Yang is a pseudonym; the author is a reporter for Caijing)