calls for a "rate cut" on existing mortgage loans have resurfaced, and here is the banking industry's attitude!
2024-09-11
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our reporter su xianggao and yang jierecently, the market has once again called for a reduction in the interest rates of existing mortgage loans. at the same time, there are also rumors in the market that relevant parties are considering further reducing the interest rates of existing mortgage loans, which has attracted widespread attention.a single stone stirs up a thousand waves. one of the deep-seated reasons why the market calls for a reduction in the interest rate of existing mortgage loans is that the interest rate of existing mortgage loans is generally higher than the interest rate of newly issued loans. according to a research report by cric research center, the average commercial loan interest rate for the first home in 30 key cities is 3.21%, and the average loan interest rate for the second home is 3.53%, while the average interest rate of existing mortgage loans is about 4%.as of the end of the second quarter of this year, the scale of existing mortgage loans in my country reached 37.8 trillion yuan. lowering the interest rate on existing mortgage loans will undoubtedly play a positive role in reducing residents' debt burden and boosting consumption growth. however, banking institutions will also face downward pressure on net interest margins, which will have a certain impact on their short-term profitability, ability to serve the real economy and risk resistance.on one hand, a large number of homebuyers are looking forward to a reduction in the interest rates of existing mortgages, while on the other hand, commercial banks are faced with the dilemma of whether to cut interest rates. faced with this situation, what is the latest attitude of commercial banks towards the adjustment of existing mortgage interest rates? what impact will the reduction of existing mortgage interest rates have on all parties? based on reality, what are the ways to achieve "interest rate cuts"? with many questions, the reporter of securities daily interviewed homebuyers, commercial banks and industry experts.some bank staff said "no notification has been received yet"for some home buyers who are burdened with high existing mortgage interest rates, the adjustment of existing mortgage interest rates is the topic they are most concerned about."the latest first-home mortgage rate in beijing can be reduced to as low as 3.4%, but the interest rate for existing mortgages is as high as 4.75%. we, the people with existing mortgages, are also looking forward to the interest rate adjustment." an owner of an existing mortgage in beijing said that now she is waiting to see whether there will be any policies introduced, while hesitating whether to choose to repay the loan early.a large number of existing mortgage owners have also stated on social platforms that their current mortgage interest rates are higher than the latest first-home mortgage interest rates.for example, some mortgage owners said that the interest rate for the mortgage they applied for in 2020 is still as high as 5.53%.
faced with the large "interest rate gap" between existing mortgage loans and current first mortgage loans, the market expects that the interest rates of existing mortgage loans can be further reduced to reduce the pressure of loan repayment. however, according to the information obtained by the reporter, commercial banks are generally "keeping their hands off" for the time being.on september 10, the reporter consulted business personnel, account managers and other relevant personnel from many commercial banks, including large state-owned banks and joint-stock banks. they all said that they had not received any notification about the adjustment of existing mortgage interest rates.a staff member of the post-loan center of a joint-stock bank in beijing told reporters: "recently, many customers have consulted on the interest rates of existing mortgages, and no new notice has been received for the time being." regarding the question of how to adjust the interest rates of existing mortgages, the staff member said frankly: "whether the mortgage interest rate is adjusted or not is not determined based on the application of a single customer, but also based on the terms of the contract and other agreements."regarding the latest statements from commercial banks, wang liang, president of china merchants bank, recently stated at a performance exchange meeting that no relevant opinions or notices from the regulatory authorities have been received, nor have opinions from within the bank been sought, and the policy has not yet been confirmed. if relevant policies are introduced, it will have a certain impact on the existing mortgage rates in the banking industry.regarding the widely discussed topic of reserve requirement ratio and interest rate cuts, zou lan, director of the people's bank of china's monetary policy department, recently responded that since the beginning of this year, the one-year and five-year loan market benchmark rates have fallen by 0.1 percentage points and 0.35 percentage points respectively, driving the average loan interest rate to continue to decline; at the same time, it should also be noted that due to factors such as the speed of bank deposits diversion to asset management products and the extent of the narrowing of banks' net interest margins, there are still certain constraints on the further decline in deposit and loan interest rates.industry insiders believe that the adjustment of interest rates on existing mortgage loans requires comprehensive consideration of multiple factors, so the adjustment requires a process.a person from a technology company responsible for a credit management system said that when financial institutions adjust the interest rates of existing mortgage loans, they need to comprehensively assess risk factors such as the borrower's credit record and repayment ability. they also need to assess whether the contract has an agreement on how to adjust the loan interest rate. in other words, adjustments require many assessments.what impact will the reduction in interest rates on existing mortgage loans have?in fact, the interest rate of existing mortgage loans was adjusted once last year, which brought many positive effects. on august 31, 2023, the regulatory authorities issued a notice to adjust the interest rate of existing first-home mortgage loans. the average reduction in the interest rate of existing first-home mortgage loans in this round of adjustment was about 80 basis points. taking an existing mortgage loan of 1 million yuan, 25 years, and an original interest rate of 5.1% as an example, assuming that the mortgage interest rate drops to 4.3%, the borrower can save more than 5,000 yuan in repayment expenses each year. after this adjustment, the pressure on commercial banks to repay in advance has been alleviated, and the burden on home buyers has been greatly reduced.in the view of dong ximiao, chief researcher of china unionpay, there are currently two situations in which interest rates can be considered for reductions: first, the interest rates of existing second-home mortgage loans that were not affected by the previous round of centralized reductions can be reduced in a centralized manner; second, after cities adjust the standards for identifying the number of housing units, the mortgage rates corresponding to first homes can be reduced in a centralized manner.ye huaibin, a researcher at the china banking research institute, told the securities daily reporter that for the real estate industry, the reduction in the interest rate of existing mortgage loans is a clear signal of policy support for the real estate market, which will help stabilize market expectations. for potential home buyers, the reduction in the interest rate of existing mortgage loans will support their confidence in buying houses and ease the wait-and-see mood of potential home buyers caused by the mortgage interest rate factor.ye huaibin also said that lowering the interest rates on existing mortgage loans will help boost consumption, and consumption is an area that needs to be focused on in my country's current macroeconomic recovery.but for commercial banks, lowering the interest rates on existing mortgage loans has both advantages and disadvantages.from the perspective of "benefits", lowering the interest rates of existing mortgage loans can ease the phenomenon of early repayment of mortgage loans. "early repayment" means paying back the loan in advance, which is an option risk for banks and will put pressure on the asset-liability matching of banks.from the perspective of "disadvantages", lowering the interest rate of existing mortgage loans will have a negative impact on the bank's short-term net interest margin. a senior person from a commercial bank told the reporter of securities daily that lowering the interest rate of existing mortgage loans will put some pressure on the net interest margin of some banks in the short term, but it is generally controllable."the reduction in interest rates on existing mortgage loans requires consideration of many aspects. in addition to paying attention to the bank's net interest margin, we must also pay attention to the market's early repayment of mortgages, the recovery of the real estate market, and investment opportunities in other financial products," said the aforementioned commercial bank official.what are the feasible implementation paths?in fact, although the regulatory authorities have not directly lowered the interest rates on existing mortgage loans in batches, relevant measures in some cities have also achieved certain results.with the introduction of encouraging policies by regulatory authorities to lower interest rates on existing first-home mortgage loans, some cities have achieved a reduction in existing mortgage interest rates through the form of "commercial to public" (commercial loans to provident fund loans) since the beginning of this year.dong ximiao told reporters that "commercial to public" means that borrowers can convert commercial personal housing loans into provident fund housing loans on the premise of meeting certain conditions. generally speaking, the interest rate of provident fund housing loans is lower than that of commercial personal housing loans of the same term. "commercial to public" helps reduce the mortgage interest expenses of borrowers and their families and reduces the pressure of loan repayment. for banks, "commercial to public" may also reduce early loan repayment.however, dong ximiao also said that according to the "housing provident fund management regulations", "commercial to public" is not a business that housing provident funds must carry out. from a national perspective, provident fund housing loans only account for about 16% of the overall housing loans, and the implementation of "commercial to public" faces limitations such as insufficient provident fund funds. borrowers should look at this rationally. relevant departments and commercial banks should actively create conditions, lower thresholds, and optimize processes to promptly handle "commercial to public" business for eligible borrowers.ye huaibin also said that some regions have mature practical experience in converting commercial loans into provident fund loans, and the interest rates of existing mortgage loans can be reduced through the original path.some institutions have also suggested that commercial banks can reduce existing mortgage loans through inter-bank "mortgage transfers", that is, borrowers transfer their existing mortgage loans directly to other banks to achieve a reduction in the interest rate of existing loans. however, the inter-bank "mortgage transfers" still need further clarification of regulatory policies.yang kewei, deputy general manager of cric research center, said that if interbank "mortgage transfer" is restarted, it may force banks to accelerate the adjustment of existing mortgage interest rates, which is undoubtedly beneficial to home buyers. however, more detailed rules are needed to be issued in the future, such as how to establish a unified loan transfer procedure, how to avoid new lending banks attaching too many loan transfer conditions, and how to alleviate the operating pressure faced by banks after the narrowing of net interest margins.image | zcool helo
produced by | guo zhichen
review | li wen
editor | caishandan
final review | zhao xueyi
