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recently, i found that many media reported that many domestic banks announced a reduction in the interest rate of personal housing commercial loans. in jiangsu, guangdong and other places, some banks have reduced the interest rate of first-home mortgage loans to 3.05%; even authoritative media reported that in yuxi, yunnan, the interest rate of first and second-home mortgage loans has entered the "2 era", falling to 2.95%. the commercial loan interest rate is almost catching up with the provident fund, so i quickly inquired about the situation in the province and helped home buyers calculate how to get a loan to make the most cost-effective.

this year's interest rate keyword: reduction

on may 17 this year, the people's bank of china issued three new housing loan policies in a row, which not only lowered the down payment ratio for personal housing loans, but also abolished the national lower limit of the commercial personal housing loan interest rate policy for the first and second homes, and lowered the personal housing provident fund loan interest rate by 0.25 percentage points.

with the implementation of the new policy, commercial bank mortgage interest rates have entered a new cycle. since the beginning of this year, the people's bank of china has lowered the lpr for more than 5 years twice, a total of 35 basis points to 3.85%, and the interest rates of newly issued first-home mortgages in many cities have fallen. according to the monitoring of rong360 digital technology research institute, as of the end of july, after the second lpr reduction this year, the average interest rate for first-home mortgages in 45 key cities was 3.29%, and the average interest rate for second-home mortgages was 3.71%.

kan caijun asked several banks in the province and learned that the interest rate for the first mortgage loan of individuals from banks such as china construction bank and china everbright bank is generally 3.35%, and the interest rate for the second mortgage loan of individuals is between 3.55% and 3.85%. a changsha real estate agent told kan caijun that the current interest rate for the first mortgage loan of individuals in changsha can be as low as 2.85%, which is the same as the interest rate for the first mortgage loan of the provincial provident fund. many banks can do it, but only within five years. there are very few customers who can meet the conditions. in the business he handled, no customer has ever enjoyed this interest rate.

as interest rates fall, how should homebuyers choose?

xiao shen, a white-collar worker in changsha, has just bought an improved house. he told kancaijun that he gave up the provident fund combined loan model and chose a plan of first taking out a commercial loan and then transferring it to the provident fund.

xiao shen's real estate agent did some calculations for him: the total price of this new house in yuhua district is 1.46 million yuan, and the loan is 800,000 yuan. if the housing provident fund combined loan method is used, the process is very complicated and the processing period is very long, which will affect the move-in of the new house. by comparing the housing provident fund and commercial loan interest rates, the monthly repayment amount of commercial loans is less than 100 yuan higher than that of housing provident fund loans, but it can save transaction time. later, after the original first house is sold, it can be converted into a housing provident fund loan.

the real estate agent told kancaijun that there are many similar cases in changsha this year, and provident fund loans are no longer the first choice. in terms of provident fund loan data, in august 2024, the provincial provident fund center issued 545 million yuan in personal housing loans that month, a year-on-year decrease of 48.52%. this downward trend is related to the decline in the overall scale of home purchases, and may also be related to the choice of home purchase loans to a certain extent.

commercial loan interest rate vs provident fund interest rate, which one is more cost-effective?

judging from the lowest interest rates for first-time home buyers in some cities, they are already very close to the housing provident fund interest rate. will the interest rate for first-time home buyers continue to fall? in this case, should we choose commercial loans or housing provident fund loans?

industry insiders believe that in the future, the room for mortgage interest rates to continue to decline depends on the extent of the reduction in funding costs and whether real estate continues to decline. as a consumer, when the gap between commercial housing loans and provident fund loans is not large, the industry insider reminded that the rapid decline in commercial loan interest rates is mainly due to sluggish market demand. in order to attract customers, banks have to lower housing loan interest rates. in this case, although it seems to be a good thing for home buyers on the surface, it may lead to instability in the loan market. in contrast, the market-oriented adjustment mechanism of provident fund loans is weak, and the interest rate is relatively stable. buying a house and repaying a loan is generally a long-term project, and more consideration should be given to medium- and long-term stability.

ming bin, deputy general manager of hunan new environment real estate brokerage chain company, said: "at present, both housing prices and interest rate policies are at a relatively low point. as a group of people with rigid demand, you can pay more attention to the local real estate market."

source: kancaibang