focus on the reduction of existing mortgage interest rates | yan yuejin of shanghai e-house real estate: this is the most powerful and most beneficial mortgage policy so far
2024-09-24
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on the morning of the 24th, the state council information office held a press conference. at the meeting, pan gongsheng, governor of the people's bank of china, announced that the interest rates on existing mortgages would be lowered and the minimum down payment ratio for mortgages would be unified. specifically:
guide commercial banks to lower the interest rates on existing mortgage loans to around the interest rates on new mortgage loans, with the average reduction expected to be around 0.5 percentage points.
the national minimum down payment ratio for second home mortgages will be reduced from 25% to 15%, and the minimum down payment ratio for first and second home mortgages will be unified.
in fact, at the end of august 2023, in order to reduce the interest burden of residents and support the expansion of consumption, the central bank and the state administration of financial supervision have jointly promoted commercial banks to lower the interest rates of existing first home loans. the interest rates of more than 23 trillion yuan of existing home loans have been lowered, and the adjusted weighted average interest rate is 4.27%, with an average decrease of 73 basis points.
however, with the lpr cut this year, the interest rate spread between new personal housing loans and existing personal housing loans has widened again. recently, calls for lowering the interest rates on existing mortgages have resurfaced.
yan yuejin, deputy director of shanghai e-house real estate research institute, said that in response to the recent topic of lowering the interest rates on existing mortgage loans, which is of most concern to the general public, the central bank has made it very clear this time that it will guide commercial banks to lower the interest rates on existing mortgage loans to near the interest rates on new mortgage loans. this means that in the near future, banks will continue to reduce the mortgage costs of those who pay monthly installments according to the central bank's deployment.
a simple calculation shows that if the interest rate can be reduced by 50 basis points, the monthly payment for a 1 million yuan loan with a 30-year equal principal and interest repayment method can be reduced by 300 yuan. this is also the second time that the interest rate on existing mortgages has been reduced nationwide since the first reduction last year, which will effectively reduce the monthly payment burden for home buyers or families repaying loans. although the intensity is not as large as the previously expected 80 basis points, it is indeed a big gift package given by the central bank to residents on the eve of national day.
regarding the down payment ratio, this time, a relaxed down payment ratio guideline has been implemented for second sets of houses or improved housing. although the down payment ratio for second sets of houses has been lowered in the past, it is still slightly higher than that for first sets of houses. however, this time it has been lowered to 15%, which will help to lower the down payment ratio and purchase threshold for second sets of houses or improved housing. a simple calculation shows that if a family subscribes to a second set of houses with a total price of 2 million, the down payment used to be 500,000, but now it has been reduced to 300,000, which directly reduces 200,000, which naturally activates the demand for improvement or house change.
the central bank's policy this time covers both existing mortgage loans and new home purchase demand, with wide coverage and great benefits, and has played a positive role in reducing home purchase costs, continuously enhancing home purchase confidence, and continuously reducing the risks of existing mortgage loans. it is also a hot topic among citizens recently, and it helps to continuously drive residents' consumption. it is the most powerful and most beneficial mortgage policy to date.
(zhang tingwang, a reporter from dazhong news and fengkou finance)
